Ultimate Resource On Peter Schiff As He Makes His Case For Gold Over Bitcoin
Bitcoin (BTC) rising above $8,500 appears to have left gold proponent Peter Schiff with egg on his face after he predicted its imminent downfall to $1,000. Ultimate Resource On Peter Schiff As He Makes His Case For Gold Over Bitcoin
Data from Cointelegraph Markets and precious metals monitor Kitco showed that while Bitcoin has gained 7.5% over the past week, gold has conversely slipped 4%.
After reaching highs of $1,610 on Jan. 8, XAU/USD has fallen dramatically, trading at $1,546 as of press time on Tuesday.
The trend is all the more conspicuous to cryptocurrency supporters, coming at a time when geopolitical upheaval centered on Iran seemed to buoy Bitcoin price performance.
While not everyone agrees, a commonly-held theory suggests that both Bitcoin and gold benefit from such political instability. Their correlation, as Cointelegraph previously noted, now looks much less convincing.
“For a time being, it appears, on the daily candle chart, that a retracement down should occur due to the metal being overbought,” Kitco quoted analysts at Swiss-based trader Dukascopy as saying on Monday.
They added that XAU/USD could drop further to support at $1,500 in the short term.
Schiff’s BTC “Pattern” Nowhere In Sight
The underwhelming progress for gold piles added pressure on those who privilege the precious metal over Bitcoin.
Schiff, a well-known crypto detractor, said in November that BTC/USD was exhibiting a so-called “head-and-shoulders” price pattern and would soon drop to just $1,000, its lowest since early 2017.
“The right shoulder is now shrugged and the neckline slanted and parallel to the shoulders. If it breaks the price objective for the dump is $1,000 to complete the pattern,” he claimed on Nov. 21 when the pair traded at around $7,800.
Not only has the omen not come true, but it is Bitcoin which has already firmly beaten gold as an investment opportunity just two weeks into the new year. Just days before 2020 began, Schiff had complained that Bitcoin was the only asset not rallying.
Peter Schiff Lost His Bitcoin, Claims Owning Crypto Was a ‘Bad Idea’
On Jan. 19, famous crypto skeptic and gold bug Peter Schiff claimed on Twitter that he has lost access to his Bitcoin wallet and that his password is no longer valid.
Schiff Added That His BTC Is Now Intrinsically Worthless And Has No Market Value. He Also Added That:
“I Knew Owning Bitcoin Was A Bad Idea, I Just Never Realized It Was This Bad!”
Getting To The Bottom Of The Issue
After Schiff tweeted about his loss, the crypto community was quick to jump to the rescue. For example, co-founder and partner at Morgan Creek Digital Anthony Pompliano responding by asking if he forgot his password, to which Schiff has responded that, “My wallet forgot my password.”
Pompliano Then Asked Schiff To Email Him Directly:
“The software just executes the commands that humans give it. It can’t ‘forget’ anything. Email me and I’ll try to help you recover the lost Bitcoin.”
However It Looks Like The BTC May Indeed Be Gone For Good, As Schiff Responded:
“Eric Voorhees set up the wallet for me and even he thinks there is nothing I can do. But you’re welcome to try if you have any ideas.”
BTC Price Skepticism
Schiff is known for being an outspoken critic of cryptocurrencies. Just before the New Year, he claimed that unlike every other asset class, BTC was not rising toward the end of the calendar year.
In late November, Schiff claimed in a Twitter debate that the price of BTC would drop to $1,000 to “complete the pattern.”
Peter Schiff Bungled Wallet Password, Solving ‘Bitcoin Mystery’
Famous crypto skeptic and gold bug Peter Schiff said that his “Bitcoin mystery” is solved after realizing that he mistook the pin of his Bitcoin (BTC) wallet for the password.
In a tweet on Jan. 22, Schiff explained that he knows the pin of his wallet, but after the app was updated, he was logged out and he could not access his funds anymore. He also admitted that he never wrote down his seed phrase:
“My #Bitcoin mystery is solved. I mistook my pin for my password. When Blockchain updated their app I got logged out. I [tried] logging back in using my pin, which was the only ‘password’ I had ever known or used. I also never had a copy of my seed phrase. Honest but costly mistake!”
Many in the crypto community have criticized Schiff for making what they perceived as a rookie mistake. When Schiff initially announced that he lost the funds, Binance CEO Changpeng Zhao said, “I can’t believe I am about to say this, but maybe “stay in fiat”?
One Twitter user stated today that Schiff “should be the last person educating/warning people about Bitcoin. [He hasn’t] taken the time to learn even the most basic things about it!” Schiff, for his part, has defended himself, explaining:
“The most basic thing about Bitcoin is that it’s not money. It will not succeed as either a medium of exchange or a store of value. What the episode does show is how easy it is to lose your Bitcoin if you are confused about how wallets work.”
Schiff announced that he lost his Bitcoin on Jan. 19, at first convinced that his wallet was corrupted and that this was the reason why he lost access to his funds, stating, “I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”
User-friendliness is important for adoption
The incident has attracted the cryptocurrency community’s attention to how the lack of user-friendliness in the ecosystem can result in lost keys and consequently, lost funds.
Zhao suggested his solution, saying that for most, keeping crypto assets on an exchange is safer than keeping the keys themselves.
Ethereum co-founder Vitalik Buterin also commented on the issue, saying that developers “can and should create better wallet tech to make security easier.” He then suggested turning to social recovery as a solution to the problem.
As Cointelegraph recently explained in an in-depth article dedicated to crypto asset recovery methods, the concept behind social recovery is to grant friends, family or even companies the right to restore access to a certain account.
Peter Schiff ‘Concedes’ Bitcoin Profitable, But Won’t Succeed As Money
Bitcoin (BTC) skeptic Peter Schiff has admitted that holding the cryptocurrency is profitable — but claims it will “never” compete with fiat currency.
In a tweet on Feb. 18, Schiff, well known as a fierce Bitcoin critic and longtime gold bug, “conceded” that the cryptocurrency in the past ten years had been a successful investment.
Schiff: BTC Investors “Make A Lot Of Money”
“I concede that anyone who bought #Bitcoin 10 years ago and sells it today will make a lot of money,” he wrote.
“But I never said the price of Bitcoin could not rise. I only said that Bitcoin would never succeed as money. Nothing that has happened over the past 10 years has proven me wrong!”
Having recovered the wallet password that he assumed he had lost, Schiff is now once again the owner of around 0.4 BTC, the result of a donation campaign that sought to endear him to its benefits last year.
While the anti-Bitcoin rhetoric has since continued, Schiff appeared noticeably angered during the time that he thought his holdings were lost forever.
His latest complaint, as before, meanwhile received little sympathy among Twitter users. Bitcoin-friendly travel agent, TravelbyBit, was among the responses.
“#Bitcoin has succeeded as money,” the company wrote.
Schiff additionally said that RT host Max Keiser had refused to debate with him on this weekend’s episode of news review show Infowars. As Cointelegraph reported, Keiser used the opportunity to “officially” change his Bitcoin price outlook from $100,000 to $400,000.
Beating Gold At Its Own Game
As Saifedean Ammous noted in his popular book, “The Bitcoin Standard,” in terms of technical characteristics, Bitcoin does not only possess the three fundamental attributes required of money but does so considerably more effectively than fiat.
Its fixed supply, impossible to manipulate, gives rise to the description of Bitcoin as “digital gold,” something Schiff has long failed to refute.
The idea that Bitcoin could soon usurp the market cap of the world’s entire physical gold reserves remains a hot topic of debate.
Peter Schiff: Sell Bitcoin Now After Fed Rate Cut Fails To Lift Price
Bitcoin (BTC) only rallying 3% this week is proof that investors should sell it, according to the latest conclusions from gold bug Peter Schiff.
In a tweet on March 4, the outspoken crypto critic claimed that Bitcoin should have taken advantage of volatility in traditional markets.
Schiff on BTC: “Look out below!”
Despite reclaiming $8,800 since the weekend, Schiff said that BTC/USD “won’t go up” and that therefore selling pressure would ensue.
“If @Bitcoin can’t rally with an emergency 50 basis point rate cut, plus all of the recent stock, bond, currency and gold market volatility, under what circumstances will it rally?” he reasoned.
“If Bitcoin won’t go up, why own it? The answer to that question is ‘sell.’ Look out below!”
Proponents used to fending off Schiff’s complaints were quick to point out that overall, Bitcoin had delivered gains several orders of magnitude higher than gold’s since its release in 2009.
“Which one would an intelligent person hold for 8 years? Gold – Still down Bitcoin – Up 2000x,” the @Bitcoin Twitter account retorted.
“Don’t be like Peter”
Commentator WhalePanda took a similar approach.
“Imagine being Peter. Knowing about Bitcoin since 2011. Still trying to say it will crash any day now,” he tweeted.
“Gold is about same price now as it was in 2011. Bitcoin… went from $1 in 2011 to $8.8k now. Don’t be like Peter.”
Despite Bitcoin’s year-to-date returns alone circling 20% at current prices, Schiff has upped the frequency of his claims that its future is doomed. Last week, he described Bitcoin investors and “suckers” and refused to believe in its increasingly-popular status as a safe haven investment.
At the same time, gold suffered its biggest one-day loss since 2013 due to coronavirus fears. After the United States Federal Reserve enacted an emergency 0.5% rate cut on Tuesday, the first such move since the 2008 financial crisis, the precious metal added 2.5%.
Peter Schiff Oblivious As Bitcoin Retakes Gold As ‘Safe Haven’ Ytd
Bitcoin (BTC) price took a bullish turn on March 10 as the digital asset surged to $8,150 before encountering resistance, which saw the price temporarily pullback to $7,730.
The S&P 500 and Dow followed a similar trajectory by surging at the opening bell before pulling back sharply in the afternoon trading hours.
“Unfortunately, A Downward Trend For Now”
Both indexes rallied into the close, possibly on the release of additional details about U.S. President Donald Trump’s proposal to shore up the US economy by extending relief funds to key industries, and a payroll tax to assist workers hurt by COVID-19’s negative impact on business.
The S&P 500 ended the day with a 5.17% gain and the Dow recovered more than half of it’s March 9 loss by rallying 1,167 points. Interestingly, Bitcoin price also made a second attempt at $8,000, topping out at $7,965 right around the time that U.S. markets closed.
Despite the strong performance, economist and Allianz chief economic officer Mohammed El-Erian told CNBC that:
“I don’t think we’ve made the lows yet, but it is going to be incredibly choppy.”
El-Erian elaborated by saying, “It’s going to be very volatile but around, unfortunately, a downward trend for now.”
El-Erian has also repeatedly cautioned investors against buying the current dips occurring within the market and the continued spread of the Coronavirus in Europe and the US is clearly weighing on investor sentiment.
At the time of writing the Dow futures are down more than 450 points and the S&P 500 futures have dropped by 2%, suggesting Wednesday open will see the markets possibly drop sharply again.
Bitcoin Versus Gold
Crypto investors subscribing to the belief that Bitcoin functions like a store of value and hedge against traditional market volatility are closely watching to see how the digital asset performs during the current correction.
For the past two weeks, the crypto asset has been in tandem with the price action of equities markets but data from Skew shows that Bitcoin returns are still up 9.45% in 2020 while the S&P 500 has dropped by 10.79%.
For those who believe Bitcoin is “digital gold”, data shows the two assets out of sync on the monthly time frame but both Bitcoin and gold are up 9.45% and 8.82% in 2020. This suggests that regardless of the fact that Bitcoin price has dropped by 14.85% since March 7, some traders still view the asset as a hedge against volatility.
Unsurprisingly, staunch Bitcoin critic Peter Schiff seems to believe otherwise and he capitalized on Bitcoin’s recent poor performance by tweeting:
“Bitcoin is no longer a non-correlated asset. It’s positively correlated to risk assets like equities, and negatively correlated to safe-haven assets like gold. When risk assets go down, Bitcoin goes down more. But when risk assets go up, Bitcoin goes up less. No value in that!”
Bullish Short-Term View
Currently, Bitcoin price is consolidating near the 61.8% Fibonacci retracement level ($7,978). As mentioned in a previous analysis, if the price can flip pull above $8,120 and flip the $8,200 resistance to support, the volume profile visible range (VPVR) suggests that the price could run as high as $8,600 by exploiting the volume gap from $8,100 to $8,600 before encountering resistance.
On the 6-hour timeframe, the moving average convergence divergence (MACD) histogram continues to rise closer to 0 as purchasing volume increases and Bitcoin forms higher lows.
Ultimately, bullish price action is going to be dependent upon purchasing volume and buyers are unlikely to pile into crypto until either traditional markets show sustained improvement or the Coronavirus loosens its stranglehold over Europe and the United States.
Although the MACD has flattened out and begun to curve up toward the signal line. The high volume VPVR nodes from $8,600 to $8,820 align with the descending trendline and barring a high volume breakout, Bitcoin is likely to struggle making a daily higher high above $8,750.
If the price were to rally to $8,500-$8,600, traders would likely open short positions at this level as they are aware of the overhead resistance and the fact that $8,500 has been a crucial price level for Bitcoin.
Peter Schiff Predicts Gold Will ‘Moon’ While Bitcoin Crashes
Outspoken crypto skeptic and gold peddler, Peter Schiff, is once again taking aim at the Bitcoin community on Twitter.
Schiff predicts that the coming years will see gold ‘moon’ while Bitcoin (BTC) “crashes back to Earth.”
‘Bitcoin Bugs’ Don’t Understand Money
In a tweet posted on April 11, Peter Schiff predicts a reversal in what he describes as a persistent trend of “Bitcoin hodlers pok[ing] fun at gold investors” over BTC’s dramatic outperformance of gold in recent years.
Schiff speculates that the trend will reverse as gold “moons” in the coming years, predicting that the price of BTC “crashes back down to Earth.”
Over the past several years Bitcoin hodlers poked fun at gold investors because #Bitcoin gained so much more than #gold. Over the next several years those roles will reverse, but not because gold rises more than Bitcoin, but because gold moons as Bitcoin crashes back to earth.
— Peter Schiff (@PeterSchiff) April 11, 2020
Schiff also claims that the crypto community has accused him of failing to understand the technology underpinning Bitcoin, countering that “Bitcoin bugs” have poor comprehension of money and its history:
“Bitcoin bugs accuse me of not understanding technology. But as I engage them on Twitter, I discover just how little so many of them understand about money, or its history. That helps explain why they were so easily suckered into #Bitcoin, and are so dismissive of #gold.”
In response to the tweets, crypto-Twitter reacted with a mix of sarcasm, solidarity with gold, and users competing to quote disparaging remarks regarding Bitcoin made by Schiff when the price of BTC was still in triple-figures.
One self-described lover of Bitcoin and racquetball responded with a description of gold as “archaic”, posting:
“It’s the year 2020, it’s about time we stop using rocks as money or a store of value. It worked great for cavemen and non-digital societies. However, we are more advanced than that now. #Bitcoin is simply the better form of money and to store your wealth in.”
Taking a friendlier tone, user BRRRRRay wrote: “In fact, most of us hold Gold as well” to chorus of fellow gold-owning crypto hodlers announcing their exposure to both Bitcoin and precious metals.
ClawManSlippy accused Schiff of inciting crypto-Twitter in a bid to promote his gold business, tweeting:
“Why are you framing this up as Gold v. Bitcoin when the actual enemy of wealth is unlimited money printing by global governments? Or is this just a sales pitch for your business interests?”
At the start of April, investment firm Van Eck published a report noting a spike in the correlation between gold and Bitcoin during 2020.
Gold Bug Schiff Calls Bitcoin Fiat Following Fed Comments
Peter Schiff agrees with the Fed that Bitcoin should be classified as fiat currency.
Economist, financial commentator and gold advocate Peter Schiff once again bashed Bitcoin in a tweet, essentially calling it fiat currency — the name for regional currencies, such as the U.S. dollar.
“The Fed Gets Bitcoin Right,” Schiff Said In A June 20 Tweet, Adding:
“It categorizes it with fiat, in contrast to gold that has real value. It sees nothing new in Bitcoin, just in the way it’s exchanged. As confidence in both traditional and crypto fiat is lost, savers will return to gold.”
The U.S. Fed Classified Bitcoin Fiat
In a June 18 post, Liberty Street Economics, a blog under the purview of the Federal Reserve Bank of New York, posited Bitcoin and other cryptocurrencies are simply cash in a different form, not a “new type of money” as the crypto industry states.
The article pointed toward the difference between money itself, and the way in which people transact or use it. “The ability to make electronic exchanges without a trusted party — a defining characteristic of Bitcoin — is radically new,” the post said, adding:
“Bitcoin is not a new class of money, it is a new type of exchange mechanism, and this type of exchange mechanism can support a variety of forms of money as well as other types of assets.”
Peter Schiff Often Favors Gold
After a number of comments on the subject, Peter Schiff has become known in the crypto space as someone who takes gold over crypto any day.
After Bashing Bitcoin As A Store Of Value In Feb. 25, 2020 Tweet, Schiff Said:
“Bitcoin hasn’t been around long enough to prove anything other than P.T Barnum right. There’s a sucker born every minute and many of them own Bitcoin.”
In April 2020, the economist also projected soaring gold prices and plummeting Bitcoin value for the years ahead. He also called Bitcoin investors fools in March.
Bitcoin Hitting $50K Will ‘Trigger’ Peter Schiff To Buy — Max Keiser
Schiff, Rogers and Mark Cuban will end up “going all in” on Bitcoin, Keiser claims, while calling John McAfee the “king of scammers.”
Bitcoin (BTC) skeptics such as Peter Schiff and Mark Cuban will all buy “huge” amounts of the cryptocurrency, Max Keiser promises.
In a tweet on June 26, the famously outspoken RT host said that he “100% guarantees” that some of Bitcoin’s biggest naysayers will ultimately flip bullish.
“They’ll go all-in with huge buys”
Gold bug Schiff, Cuban, and investor Jim Rogers will at some point fly the flag for Bitcoin instead of any alternative.
“@PeterSchiff Jim Rogers, @mcuban and other pre-coiners represent huge pent-up #Bitcoin buying demand,” Keiser wrote.
“When they finally understand it, they’ll go all-in with huge buys. I 100% guarantee this to be the case.”
A further tweet and survey predicted that for Schiff to come on board, BTC/USD would need to trade at $50,000 at the most. Keiser wrote:
“The longer @PeterSchiff waits to buy #Bitcoin, the bigger the panic-buy. My guess, $50,000 triggers him. What price do you think triggers Schiff to panic-buy Bitcoin?”
The curious prediction comes days after Rogers told the mainstream media that governments will have to destroy Bitcoin.
“I believe that the virtual currency represented by bitcoin will decline and eventually become zero,” he told Japanese outlet Aera Dot.
Keiser, McAfee and the “King of Scammers”
Despite his pledge, meanwhile, Keiser may not be wholly sincere. Friday’s Twitter activity saw him label John McAfee the “king of scammers” and call McAfee’s wife a “Karen.”
“Example of someone who’s *not* a #Bitcoin influencer: John McAfee,” part of another post reads.
“He came to BTC late (was already past $2,000) And after initial, splashy outrageousness – proceeded to wipe out Bitcoiners globally with his extremely dodgy ‘coin of the day’ scam.”
Both McAfees retaliated, with Keiser remaining silent at press time. In an interview with Cointelegraph last week, however, he was as vocal as ever, forecasting that fellow investment magnate Paul Tudor Jones would own more Bitcoin than anyone else by 2022.
Later, on a recent episode of his Keiser Report TV show, he appealed to Americans to buy Bitcoin instead of protesting to effect social change. Protesting, Keiser argued, “does nothing.”
Hold More Gold Than Bitcoin, Says BTC Bull Mike Novogratz
Michael Novogratz, who predicted BTC to hit $20,000 by the end of 2020, advises investors to own more gold than Bitcoin.
Michael Novogratz, one of the biggest Bitcoin (BTC) bulls in the world, does not recommend investors to put the majority of their funds into Bitcoin.
Although Novogratz is confident that Bitcoin “way outperforms” the precious metal, it is still safer to buy more gold than Bitcoin due to the cryptocurrency’s highly volatile nature.
Bitcoin Is Still “Early In The Adoption Cycle,” Novogratz Says
“My sense is that Bitcoin way outperforms gold, but I would tell people to have a lot less Bitcoin than they have gold, just because of the volatility,” Novogratz said during CNBC’s Fast Money on July 8.
According to Novogratz, Bitcoin is still “early in the adoption cycle,” which means that the cryptocurrency is still hard to obtain. However, the major digital currency will be gradually gaining momentum as more companies around the world are introducing more tools to bring the mass adoption to crypto.
“Bitcoin is still hard to buy. If it was easier to buy, it would be a lot higher. And there are more and more people making it easier to buy: funds being set up, custodies being done, at one point we’ll get an ETF.”
Gold Prices Hitting 9-Year Highs Amid Coronavirus
Novogratz’s call to prioritize gold over Bitcoin comes amid gold prices hitting a nine-year high. On July 9, gold broke a $1,800 threshold, reaching the highest price since September 2011. The soaring gold prices are apparently a result of economic fears over the novel coronavirus. As of press time, spot gold trades at $1,810, up about 0.1% over the past 24 hours.
Novogratz is known as one of the biggest crypto and blockchain investors. He runs Galaxy Digital, a major crypto venture capital firm and trading desk. Alongside investing in the emerging industry, Novogratz is bullish on BTC price, predicting Bitcoin to hit $20,000 by the end of 2020.
Last year, Novogratz predicted that institutional interest would push the Bitcoin price back to $20,000 before the end of 2019.
The cryptocurrency failed to meet these expectations, eventually trading around $7,000 at year’s end.
Bitcoiners Are Not Looking For A Store Of Value, Gold Bug Peter Schiff Says
Although Bitcoin holders often describe the asset as a store of value, gold advocate Peter Schiff said such participants do not actually seek wealth storage, hunting instead for profit.
A known gold enthusiast, financial commentator Peter Schiff said Bitcoin (BTC) holders are not actually looking to the asset as a storage of wealth — one of the most commonly touted use cases surrounding the coin.
“I buy gold as a way to store my wealth, as a conservative place to keep liquidity, as opposed to keeping it in dollars or some other fiat currency,” Schiff told interviewer Peter McCormack, host of the What Bitcoin Did podcast, during a July 17 episode. “I do think that when people are buying Bitcoin, they’re really not looking for that,” Schiff added.
Bitcoin Buyers Want Gains
The crypto and blockchain industry commonly refers to Bitcoin as a store of value or place to park wealth. The asset has also received a number of comparisons against gold. According to Shiff, however, BTC owners actually want profit, not steady wealth protection against inflation.
“People who are buying Bitcoin are not looking for stability. They’re not looking to maintain their purchasing power. Pretty much everybody that I talk to that’s into Bitcoin, thinks it’s going to go up to $50,000, $100,000, $1,000,000.”
Bitcoin Has Risen To Astronomical Heights Since Its Launch
Valued at less than a penny shortly after its 2009 launch, Bitcoin rocketed up to almost $20,000 per BTC at its all-time high in 2017, tallying unheard of profits for early investors. Bitcoin has held as a profitable investment for 89% of its lifetime, as of late 2019 Cointelegraph reporting. Given its astronomical price climb through the years, do asset holders subconsciously just want profits?
“They think they’re going to get rich on Bitcoin,” Schiff said following up his comment on people’s price expectations for the asset. “I don’t tell anybody they’re going to get rich on gold, they’re just not going to go broke with gold,” Schiff explained. “They’re going to preserve their wealth that other people are going to lose.”
Posing a contrary view, Bill Barhydt, CEO of financial investing and wallet platform Abra, said he sees the store of value narrative as Bitcoin’s top use case at present.
Schiff Buys More Bitcoin: But There’s A Twist
It all goes horribly wrong for Peter Schiff, as Twitter rejects his advice in favor of his college freshman son’s wisdom.
The vast majority of Twitter users trust 18-year-old Spencer Schiff’s investment advice over that of his father, Peter Schiff — a renowned gold bug and Bitcoin critic.
“Against my advice my son just bought even more Bitcoin,” said Schiff. “Whose advice do you want to follow?”
Against my advice my son @SchiffSpencer just bought even more #Bitcoin. Whose advice do you want to follow? A 57-year-old experienced investor/business owner who’s been an investment professional for over 30 years or an 18-year-old college freshman who’s never even had a job.
According to a Sept. 7 tweet from Peter Schiff, 81% of over 46,000 Twitter users who replied to the poll would prefer the advice of an “18-year-old college freshman who’s never even had a job” over that of a man with more than 30 years’ experience as an investment professional.
The younger Schiff was quick to respond to his father’s remarks and the survey results, stating that Crypto Twitter appeared to be backing him. Others enthusiastically showed their support for Spencer on social media.
“Your son will be a multi-millionaire at least by the time he’s 57 if he keeps buying Bitcoin,” said Quantum Labs CEO Usman Majeed.
However, a few thought that a father and son favoring different assets was more of an investment strategy.
“Using your son to hedge your gold bet is a great idea,” said Morgan Creek Digital co-founder Anthony Pompliano. “Gold goes up, you benefit. Bitcoin goes up, your son benefits. Clever way to be long [on] both assets without publicly capitulating on gold.”
Pompliano wasn’t the only commentator who reached this conclusion. “Sounds like Peter is making sure he can have it both ways depending on Bitcoin’s success or failure,” said Reddit user Spl00ky. “If Bitcoin fails, he’ll say: ‘See, my son should have listened to me.’ If Bitcoin succeeds, he’ll say: ‘Look how smart my son is, the apple doesn’t fall far from the tree.’”
The survey comes just two weeks after Schiff solicited Bitcoin (BTC) donations from Twitter for his son’s 18th birthday. Although the wallet connected to Spencer Schiff currently holds no Bitcoin, it has seen transactions worth 0.11 BTC since August 27th.
Fool’s Gold? Peter Schiff’s Bank Under Investigation In Tax Evasion Probe
Does an extortion attempt from Russian hackers explain Schiff’s hatred for Bitcoin?
This morning, millionaire broker and noted Bitcoin skeptic Peter Schiff awoke to find his bank under renewed scrutiny due to an international criminal investigation.
According to reporting from Australian newspaper The Age and The New York Times, the J5 — a joint task force of tax authorities from major Western governments convened in the wake of the bombshell publication of the Panama Papers — have placed “hundreds” of accounts at Schiff’s Puerto Rico-based Euro Pacific Bank under investigation for tax evasion and other financial crimes.
The reports detail what appears to be a comically inept organization responsible for harboring the fortunes of a cast of shady businessmen and criminals. Employees hired after a quick Google search screening were tasked with attracting clients such as Simon Antequetil, the noted Australian fraudster and tax avoidance maestro.
The reports also shed light on how Euro Pacific may have tainted public holdings of Schiff’s favorite asset: gold.
Former Australian Federal Police (AFP) investigator John Chevis discovered in 2017 that West Australian government-owned Perth Mint had a relationship with Euro Pacific.
“I was very surprised,” Chevis told The Age. “I think there’s a significant risk that some of the gold held within the Perth Mint by customers of the Euro Pacific Bank may be held beneficially for criminals in other parts of the world.”
In an interview with The Age last month, Schiff denied wrongdoing on the part of Euro Pacific, saying the bank “turns down far more accounts than we approve because our compliance is so rigorous”.
“It’s got nothing to do with reality,” he said of the allegations.
He later stormed out of the interview.
But nestled amid the reports is a key detail which may shed some light on why Schiff has been such a virulent critic of the world’s most popular cryptocurrency, Bitcoin.
From The Age:
“The bank’s security was also a problem […] at one point, Russians tried to extort the bank for a ransom of 1000 bitcoins, worth millions of dollars.”
Schiff has also demonstrated a history of paranoia regarding hacks, especially cryptocurrency-related hacks. In July, Schiff augured that the hack of multiple Twitter accounts by an American teenager might be a “harbinger” for a Bitcoin hack, and in April he tweeted about “the potential for improvements in technology to hack the blockchain and counterfeit Bitcoin.”
Despite Schiff’s concerns over the potential hacking of the Bitcoin blockchain, there is no equivalent in the digital asset world to iron pyrite. Unless we count BSV.
Gold Drops To 7Oz Per BTC As Peter Schiff Calls Bitcoin ‘Biggest Bubble’
Gold sinks to yearly lows against Bitcoin but Peter Schiff remains convinced that the former’s price gains are ill-gotten.
Bitcoin (BTC) hit seven ounces of gold for the first time in over a year this week as the precious metal comes off all-time highs.
Data from CoinGecko showed BTC/XAU returning to the pivotal 7 ounce mark on Oct. 25, continuing to edge up to press-time levels of 7.02 ounces.
Gold Hits One-Year Lows In BTC
Despite Bitcoin losing ground after challenging $14,000, the gains against gold remained on Thursday, as the traditional safe haven felt the pressure of Coronavirus tensions and U.S. election uncertainty.
The last time that BTC/XAU broke 7 ounces was in September 2019.
Commenting on the latest events, quant analyst PlanB, creator of the stock-to-flow family of Bitcoin price models, called the move “significant.”
“It looks like #Bitcoin is getting ready to conquer a larger portion of the gold market cap,” data monitor Ecoinometrics responded on Twitter.
“Right now #BTC is at about 2.4% of the market size of gold. This is only the beginning.”
The sentiment echoed recent comments by Real Vision CEO Raoul Pal, who said that gold was “breaking down” against Bitcoin and that other macro assets would follow.
“The next thing I’m expecting is the correlations between BTC and the dollar and BTC vs equities to break down too… let’s see,” he wrote last week.
Schiff: Bitcoin Is “The Biggest Bubble I’ve Seen”
Reacting to the latest price action, embattled gold bug Peter Schiff did not hold back. Despite BTC/USD staying far from its $20,000 all-time highs, in a fresh Twitter post, Schiff described the largest cryptocurrency as a “bubble.”
“If you measure the size of asset bubbles based on the level of conviction buyers have in their trade, the #Bitcoin bubble is the biggest I’ve seen,” he claimed.
“Bitcoin hodlers are more confident they’re right and sure they can’t lose than were dotcom or house buyers during those bubbles.”
Bitcoin has yet to suffer as a result of renewed uncertainty across the global economy, leading to increased claims that its correlation with traditional assets has all but disappeared.
As Cointelegraph reported, correlation between BTC/USD and the S&P 500 hit zero again this week, as Bitcoin struck out on its own in its latest gains.
“It could not be more uncorrelated than it is right now,” Anthony Pompliano, co-founder of Morgan Creek Digital, summarized.
Bitcoin Up 375% Since Peter Schiff Accidentally Called The Exact Bottom
Schiff gave anyone reading his Twitter account in March “maximum opportunity” to profit, a popular trader says as Bitcoin tops $17,000.
The Bitcoin (BTC) price bottomed at exactly the point that gold bug Peter Schiff said that it would crash further — and proponents are reminding him of his mistake.
Retweeting a now infamous Twitter post that Schiff made in mid March, popular trader “CryptoBull” noted that he had accidentally called Bitcoin’s bottom, not top.
Schiff Tweet “Marks Exact Bottom” For BTC
Schiff was complaining that he had lost access to his Bitcoin wallet, but that soon it wouldn’t matter, because BTC/USD would keep crashing.
“With Bitcoin crashing below $4,000 I don’t feel so bad about having lost all my Bitcoin,” the tweet read.
“At the rate my lost Bitcoin are losing value soon the difference between having Bitcoin and not having any Bitcoin will be too small to matter.”
At the time, Bitcoin was trading near its 2020 lows of $3,600. On Tuesday, eight months later, CryptoBull did not mince wordsas the asset hit $17,000.
“This tweet marked the exact bottom aka point of maximum opportunity,” he wrote.
Bitcoin has vastly outperformed gold over the past month, with a divergence between the two assets becoming increasingly conspicuous.
Supply Gap Looms Large
Bitcoin was up 375% from Schiff’s “top” at press time, challenging its all-time highs from 2017 amid fresh forecasts that it would continue climbing thereafter.
“Since Bitcoin was at $11.4K a month ago, miners have been selling an average 11 BTC per hour at exchanges,” statistician Willy Woo explained regarding the current market composition driving the gains.
“In comparison 214 BTC per hr has been scooped off exchanges. This is net flows of buyers over sellers. This week’s average is 328 BTC per hr.”
As Cointelegraph reported, the simple supply versus demand equation firmly favors further upside for Bitcoin, this coming thanks to corporate demand from the likes of PayPal, Square and investment giant Grayscale.
Paxful, PayPal’s payment handler for its cryptocurrency feature, saw a 500% volume increase over the past month.
Bitcoin, Gold To Benefit As Peter Schiff Predicts ‘Worst Year Ever’ For US Dollar
Multiple voices forecast a weaker dollar in the long term, starting now, in a prime boost for safe havens.
Bitcoin (BTC) may get fresh support for a record-breaking year in 2021 thanks to the demise of a familiar foe: the U.S. dollar.
As various sources noted this week, the dollar is trading at almost three-year lows against various currencies and five-year lows against the Swiss franc.
Analyst: Long-Term Trend “Clearly Dollar Weakness”
Weakness in the dollar tends to translate into strength for Bitcoin, and 2020 has been the year in which the U.S. dollar currency index (DXY) has become a reliable yardstick for price direction.
An inverse correlation has been palpable throughout 2020, and while Bitcoin’s relationship with DXY has broken down more recently, analysts remained convinced that the fresh lows were only good news for the cryptocurrency.
A combination of renewed hopes of global economic recovery and a new coronavirus stimulus package are the latest threats undermining the dollar. DXY hit 91.1 on Tuesday, its lowest since April 2018.
“When you get a report that a bipartisan stimulus deal can get done after hopes have been dashed, it’s just another reason to bid risk up and sell the dollar,” John Doyle, vice president of dealing and trading at Tempus, told Reuters.
Even Bitcoin skeptic Peter Schiff — as ever, fully enamored with gold — agreed with hodlers on the dollar’s fate.
“The U.S. dollar is now trading at its lowest level against the Swiss franc since Jan. of 2015,” he noted on Wednesday.
“This is a harbinger of things to come. The franc is leading the way, but other currencies will soon follow. 2021 may be the worst year ever for the U.S. dollar, at least until 2022.”
Grayscale Gives Accidental Buy Signal For Gold
On the topic of gold, meanwhile, Schiff’s loyalty may soon be rewarded as the precious metal bounces back from its current lackluster performance.
Barry Silbert, the founder of cryptocurrency asset management giant Grayscale, confirmed that the firm had brought back its “Bitcoin-not-gold” advertisements this month, a move that signals the market believes that gold has bottomed, one analyst said.
Gold Bug Peter Schiff’s Son Clowns His Dad Over Bitcoin 50K Price Prediction
“While a temporary move up to $100K is possible, a permanent move down to zero is inevitable,” Schiff said on Twitter.
The man who once said “Bitcoin will never hit 50K” has doubled down on the bearish prediction that Bitcoin (BTC) will eventually go to zero.
Back in 2019, CNBC host Joe Kernen speculated that Bitcoin’s price would reach $55,000 by May 2020. Peter Schiff mocked him at the time, saying “Bitcoin will never hit 50k.”
Though somewhat delayed, the price of Bitcoin hit a new all-time high of more than $50,000 this morning after rising 8% this week. Members of Crypto Twitter — including the gold bug’s own son — threw Schiff’s words back at him.
In the wake of his predictions proving to be false, Schiff upped the ante, saying a Bitcoin price of $100,000 “can’t be ruled out,” but a “permanent move down to zero is inevitable.” Schiff’s son Spencer, a Bitcoin proponent, was quick to poke some fun at his father’s seeming inability to admit that he might have been wrong about Bitcoin.
A well-known Bitcoin detractor, Schiff has made several incorrect predictions about the crypto asset’s price movement over the years, choosing instead to push gold investments. During the price crash of March 2020, the gold bug said that Bitcoin would drop much further than $4,000. His prediction turned out to be the bottom, not the top, of a major price movement.
Schiff said he “got that one wrong” regarding the new all-time high, but still called a $50,000 Bitcoin “the biggest bubble” of all financial assets. However, even some of his gold predictions have proven to be less than accurate. In 2010, Schiff reportedly said the price of gold would be “$5,000 to $10,000 per ounce in the next 5 to 10 years.” In fact, the price of the precious metal barely passed $2,000 in 2020 before retreating to the $1,700s.
Elon Musk Says BTC, ETH Prices “High” While Dunking On Peter Schiff
While Musk said Schiff “might as well” have crypto in lieu of gold deposit statements, he did warn that digital currency valuations may be running hot.
While his electric car company announced a Bitcoin purchase weeks ago, Elon Musk finally became a true Bitcoiner last night by engaging in a time-honored cryptoTwitter pastime: dunking on Peter Schiff.
Yesterday morning Schiff, the noted gold bug and Bitcoin skeptic, posted a Tweet thread in which he criticized Elon Musk’s comment that Bitcoin is a flawed currency, though still better than fiat alternatives:
According to @elonmusk “Bitcoin is almost as BS as fiat money.” So Musk regards both #Bitcoin and fiat as BS. I agree, I just think Bitcoin, which is digital fiat, is even more BS than the paper fiat issued by central banks. #Gold is not BS. It’s real money and better than both!
Schiff noted that, “as an engineer” the Tesla founder should know the difference between a “tangible element” and a “string of numbers,” and said that gold has greater utility relative to Bitcoin.
“Money isn’t data. Data can represent money but can’t replace it. Money improved barter, gold improved money, and data improved #gold. Bitcoin is a return to barter. All sellers will accept money. With #Bitcoin you must find a seller who has what you want and wants what you have,” Schiff concluded.
In response, the Tesla founder criticized Schiff’s view of third-party gold storage as an additional layer of trust, saying he “might as well have crypto.”
An email saying you have gold is not the same as having gold. You might as well have crypto.
Money is just data that allows us to avoid the inconvenience of barter.
That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.
Considering how flippant Musk has been in promoting the Dogecoin meme currency, he also hedged his statement with a perhaps surprising follow-up, warning that prices for Bitcoin and Ether are “high.”
While tempered, the Twitter statements are just the latest vote of confidence the world’s richest man has put into cryptocurrencies. Earlier this month Tesla used 7.7% of gross cash on hand to purchase Bitcoin, a sum worth $1.5 billion, and later followed up by saying “only a fool” wouldn’t seek investments beyond fiat.
Schiff, meanwhile, continues to be a punching bag so universal that even shawarma restaurants get in on the fun. While he’s recently admitted that Bitcoin isn’t the scam he once accused it of being, he remains resolutely in favor of physical bullion as an investment. His Twitter trash-talking carries on even as his bank remains under investigation.
Did The $50,000 “Lead” Peter Schiff To Buy BTC?
Peter Schiff And Bitcoin: “If I buy, I’m out”
It may be time for the Bitcoin bulls to break out while they can, because one of the biggest critics of the cryptocurrency could buy a large amount.
In a decidedly cryptic tweet over the weekend, the gold beetle Peter Schiff asked at what point should he look to sell any BTC he could buy.
“If you actually bought some Bitcoin, how would you know when to sell? If your answer is never to sell, then what is the point of buying in the first place? ” I ask.
“I cannot change it, since the merchants do not accept it. I have to sell it first, either myself or using a broker like Bitpay. But I am not talking about small amounts. When do I sell to take a profit or cut my losses? “
Schiff has already dabbled in Bitcoin, complaining about the loss of his wallet password, but has made a name for itself by shaming its economic base and promoting gold as the only option to avoid fiat money inflation.
Interest in hodling, therefore, real or not, put the trading community in check, who saw it as a classic sign of a bull market getting out of control.
“Little by little and then suddenly. If you buy, I’m out”, answered cryptocurrency trader Scott Melker.
As Cointelegraph reported last year, Bitcoin hitting $50,000 could be the event that “triggers” Schiff’s investment.
Peter Schiff’s Son Moves 100% Of His Portfolio Into Bitcoin
Peter Schiff calls his son “brainwashed” for his 100% Bitcoin portfolio.
Spencer Schiff, the son of gold bug and major Bitcoin (BTC) critic Peter Schiff, seems to have decided to move all his portfolio investments into one single asset, Bitcoin.
“My son went all in on Bitcoin on the last drop below $50k. 100% of his portfolio is now in Bitcoin,” gold bug Schiff announced Wednesday on Twitter. The famous Bitcoin skeptic specified that his son sold the last of his silver stocks for cash.
Schiff went on to express concerns over the investment choices of the younger generation, stating, “If my own son is this brainwashed imagine how vulnerable most kids are. He’s HODLing to infinity or bust.”
The crypto community has widely welcomed the announcement, with many people expressing confidence that the 100% Bitcoin investment will make Schiff’s son richer than him. “At least someone in your family is growing their wealth this year,” Morgan Creek Digital’s co-founder Anthony Pompliano subsequently wrote.
In response, Schiff said, “I need to disinherit him. Otherwise he will squander my hard earned wealth on more Bitcoin.” Schiff also emphasized that his own portfolio is not limited to gold, and the “vast majority” of it comprises equities.
Despite Schiff’s criticism of his son’s decision to go 100% Bitcoin, Schiff himself apparently played a big role in this decision. Apart from regularly tweeting about Bitcoin, Schiff was the one who initiated the idea of Bitcoin birthday gifts for his son on Twitter in 2020. Schiff subsequently insisted that his son was investing in Bitcoin “against his advice.”
A vocal Bitcoin critic, Schiff claimed in 2019 that Bitcoin would have never hit $50,000. Following Bitcoin’s rally up to $57,000 in February 2021, Schiff admitted that a move up to $100,000 “can’t be ruled out either.”
NYC Real Estate Mogul Secures $6 Billion In Gold To Back New Cryptocurrency
Kent Swig became interested in cryptocurrencies after learning more about the concept from his teenage son.
New York City real estate mogul Kent Swig has secured a minimum of $6 billion in gold reserves to back his new cryptocurrency.
The value of the digital token, DIGau, will be pegged to the market price of the precious metal, guaranteed by liens Swig and partner Stephen Braverman’s company, Dignity Gold, secured against mining claims in Nevada and Arizona.
“Gold was one of the original rock-solid backings of all currencies,” Swig, 60, said in an interview. “We’re not reinventing the wheel here. What we’re doing is applying the world’s stable backing of a lot of things to a very advanced technology.”
A third-generation real estate investor and owner of realty firm Brown Harris Stevens, Swig became interested in cryptocurrencies after learning more about the concept from his teenage son.
So-called stablecoins are cryptocurrencies whose value can be pegged to an external reference, which could be a physical asset like gold or the U.S. dollar. That, in theory, provides more price stability — a buffer against the huge swings seen in digital currencies like Bitcoin.
Coin issuers like Swig and Braverman’s Dignity Gold, parent of DIGau’s issuer, must hold the value of their reserve currency at all times, to assure investors there’s a backstop against the price falling below the fiat currency.
Tether, one of the best-known stablecoins, has been dogged by speculation for years that it wasn’t backed one-to-one with U.S. dollars, as claimed. Tether’s issuer agreed in February to provide quarterly reports to New York as part of a settlement over allegations that it hid the loss of funds and lied about reserves.
Tether also has a gold-backed product, Tether Gold, where each token represents one troy fine ounce of physical gold.
Both gold and cryptocurrencies have attracted renewed interest over the past year from investors seeking a hedge against inflation. Gold has risen 14% since January 2020, while the price of Bitcoin — the most widely circulated cryptocurrency — jumped to a record high of $63,179 Tuesday morning.
Still, the combination of gold and crypto has a poor track record, with several attempts to combine variations of the two gaining little traction. Cryptocurrency devotees tend to disdain bullion, with Bitcoin even gaining the moniker “digital gold” as it is promoted as a modern-age alternative.
Swig said it took him 18 months of worldwide hunting for gold assets to secure the $6 billion of reserves. Though open to gold deposits anywhere, having the deposits located in the U.S. gives added credibility and transparency to the token, he said.
Along with the pledge and security agreement, Dignity Gold has a forward purchase agreement for gold produced from the mines, which are located in Lincoln County, Nevada, and Mohave County, Arizona.
DIGau will be unique as a gold-backed, U.S.-based crypto security that pays a dividend to token-holders, according to Swig. The token will be issued in accordance with the various regulatory processes of the Financial Industry Regulatory Authority and other bodies.
While wealthy individuals and family offices are increasingly investing in digital currencies, few have yet to launch their own.
“In general, the business of cryptocurrencies is extraordinary,” Swig said.
Peter Schiff Wins Debate Over Whether Gold Is A Better Store Of Value Than BTC
During the debate, Schiff said that “in reality, Bitcoin and gold have absolutely nothing in common” as gold has value due to its metallic properties, while Bitcoin is just a “giant pump and dump.”
Gold proponent and crypto skeptic Peter Schiff has been crowned the winner of a debate on whether gold is a superior store of value to Bitcoin (BTC).
Schiff was facing off against Skybridge founder and former politician Anthony Scaramucci in a debate hosted by Intelligence Squared on Wednesday.
Before the gold vs. Bitcoin debate began, a poll scored 38% of the online audience in favor of the precious metal, 26% for BTC, and 35% as undecided. Schiff had been able to swing a significant number to the precious metal by the end, with final results tallying in at 51% for gold, 32% for BTC, and 17% undecided.
Scaramucci kicked things off by asserting that BTC’s value is derived from its network, which enables peer-to-peer transactions without a third party. He also suggested that BTC has an edge over gold because of its scarcity and digital properties:
“I think this cryptocurrency revolution — and Bitcoin specifically, because of its scarcity — is going to transcend gold. It’s more portable; it’s impregnable in terms of the transaction over the blockchain; […] and it’s being adopted quite rapidly.”
“A result of which the prices are going to go a lot higher,” he added.
In response, Schiff said that “in reality, Bitcoin and gold have absolutely nothing in common” as he argued that Bitcoin is marketed like gold but doesn’t possess any of the “metallic properties“ that give gold value.
“Part of the marketing fraud is to try to portray Bitcoin as gold, gold 2.0, digital gold. I mean, Bitcoin itself is always displayed as a coin, and the color is gold, and you put like a ‘B’ on it. But it’s not a coin; it’s just a digital string of numbers; it doesn’t have any substance,” he said.
He argued that there is a difference between “price and value,” with gold’s value being determined by real-world use cases, while BTC doesn’t have tangible backing in the real world:
“In 100 years, in a 1,000 years, the gold that I’m storing today can be melted down and used in electronics or used in jewelry, or for whatever new uses have been invented that don’t even exist today.”
Throughout the debate, the crypto skeptic described BTC as a “Ponzi scheme,” a “giant pump-and-dump” and “tulip mania.” Schiff is also unfazed by the rising price of the asset, as he believes that late adopters of BTC are being gradually dumped on by whales who got in early.
Here is the Intelligence Squared #Bitcoin vs. #Gold debate I did with @Scaramucci. Since you Bitcoin pumpers forgot to rig the vote this time I was actually able to win this one. Check it out and judge for yourself. https://t.co/Q2UuZmevAx
“In my mind, it is a giant pump-and-dump, where the guys that got in relatively early […] are constantly trying to pump up the market in order to generate a lot of enthusiasm and momentum and FOMO so that they can sell out gradually into this market that they are creating,” he said.
Scaramucci reiterated that the value of BTC is tied to its global network and that digitization in the next stage of humanity as “software is eating the world.” Schiff stated he would only change his mind if BTC was backed by gold and was actually used as a currency as opposed to being traded primarily.
In Celebration Of His Win, Schiff Called Out BTC Proponent And Microstrategy Ceo Michael Saylor In Jest:
“I just gotta say one thing: Michael Saylor, stop ducking me, I know you’re out there.”
Famous Bitcoin Critic Peter Schiff Trying To Save Puerto Rico Bank Under Probe
SAN JUAN, Puerto Rico — Schiff said he also was upset that the bank’s operations were suspended by Puerto Rico’s Office of the Commissioner of Financial Institutions, which announced the move on Thursday and accused the bank of a lack of internal controls, a lack of compliance and a level of insolvency. Officials noted it was separate from the J5 probe.
U.S. financial analyst Peter Schiff told The Associated Press on Friday that he will fight to be able to sell a bank he established in Puerto Rico even though authorities have suspended its operations as part of an investigation.
Euro Pacific International Bank obtained a license in 2017 to operate in the U.S. territory and built up some 15,000 accounts two years later, but its deposits have dropped to $150 million and it lost customers after the Joints Chief of Global Tax Enforcement — a multi-government group fighting tax crimes and money laundering — said it acted two years ago “to put a stop to the suspected facilitation of offshore tax evasion and money laundering by the bank.”
“We lost a lot of things because people were afraid,” Schiff said.
He added that while he doesn’t like anti-money-laundering rules, or regulations or taxes, he does abide by them.
“The fact that I’m so willing to publicly criticize rules, you better believe I’m doing all I can not to break them,” he said.
The so-called J5 agency, whose members are the U.S., the UK, Canada, Australia and the Netherlands, said Thursday that an investigation into the bank is still ongoing, although it declined to provide details.
Schiff said that was a lie, that the bank has never been investigated. He said agents with the Internal Revenue Service visited the bank in 2020 and told him they were investigating customers of the bank.
“Our compliance is so rigorous, and we close accounts so quickly,” he said, adding that he never took clients related to cryptocurrency, cannabis or other fields. “I did everything by the book, and it cost me a fortune.”
A spokeswoman for J5 did not return a message for comment Friday.
“It’s a huge shock that they’ve done this,” Schiff said of the bank’s suspended operations.
Schiff said that while he didn’t realize the bank was undercapitalized until it was audited, he stressed it was not a matter of solvency but regulatory minimum capital requirements.
He said the bank always has had a positive net worth and that while there was a deficiency based on deposits, the commissioner told him not to worry because a buyer had appeared.
Schiff said a Houston-based bank wanted to buy Euro Pacific International Bank and that he submitted an application in January to start the process.
“They were going to rename it, rebrand it, so it would no longer have that stigma,” he said.
Natalia Zequeira, commissioner for Puerto Rico’s Office of the Commissioner of Financial Institutions, told The Associated Press on Friday that she doesn’t understand why Schiff was surprised by the agency action since the office met with him in October and he signed a consent form to make the changes required.
She added that the bank submitted a business plan, capital plan and strategic plan that her office did not approve, and said the bank did not refile those or correct deficiencies.
“Surprises like the one Mr. Schiff had yesterday are a result of not reading the fine print of your regulator,” she said.
Zequeira said the consent order he signed required changes in management and strategy that did not happen, and that those processes are separate from a change in ownership.
“A regulator has the right to request the best of its institution, and just because you filed something doesn’t give you the right to conclude that you’re in compliance,” she said. “Regulators are not babysitters.”
The office’s cease-and-desist order stated that the bank had a net loss of nearly $751,000 in 2019 and overall accumulated losses of nearly $4 million. It added that at the end of 2020, the bank had a capital of negative $1.3 million:
“As such, the entity is classified as insolvent.” In the first trimester of 2022, the bank had a net loss of nearly $550,000, the order stated.
Meanwhile, Schiff said he has invested $7 million of his own money to keep the bank afloat and that all customers can get 100% of their money back.
“Right now, not a single customer is in jeopardy,” he said.
Zequeira, however, said Schiff’s personal money does not represent the capital of the institution, adding that the financials show “a very high risk” for his clients. The cease-and-desist order also called for a $765,000 penalty to be paid to Puerto Rico’s Treasury Department.
Zequeira said an administrative officer is scheduled to hear the case on July 7 and could decide on whether to appoint a new manager or liquidate the bank, adding that Schiff has the right to go to an appeals court if he disagrees.
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