Tokenized Gold vs The Bitcoin Standard: Peter Schiff vs Saifedean Ammous (Transcript)

Let’s see, Saifedean, you’ve got 4 minutes starting now.

SAIFEDEAN AMMOUS: Yes, so first of all, let me begin by saying I sympathize with the gold cause. I was a gold bug for the longest time. The Bitcoin Standard probably talks about gold more than it talks about Bitcoin. I’m a huge fan of the monetary role that gold has played over the years, and I would be very happy if we go back onto a gold standard. In fact, this might annoy some Bitcoiners. Even though I love Bitcoin a lot, I hate fiat a lot more. I’d like to kill fiat more. And so if gold does take over, if we do go back to a gold standard, I don’t even care what it does to my Bitcoin bags. I would be incredibly happy.

However, just like I know that the horse-drawn carriage and the typewriter are not going to replace my car and my smartphone, I know that gold is not going to replace fiat. And if by some miracle it does replace fiat, it will not be able to stop Bitcoin from replacing it and fiat, quite simply because it is inferior technology to Bitcoin as money.

And the reason for that is best understood from looking at gold itself, as I do in The Bitcoin Standard. If you want to understand money, you have to understand why gold was money for thousands and thousands of years. And contrary to what a lot of gold bugs think, it’s not magic, it’s nothing mystic, it’s not because it’s yellow and shiny, it’s not because of the unique sound that it makes when it drops. All of these mystic qualities that they attach to it, which essentially are the reason why they can’t see the value of Bitcoin, are not the reason why gold is valuable.

The reason gold is valuable, the reason it became money, is because it is the metal that has the lowest supply growth rate. That’s it. That’s the most important property it has. Of course, it’s the chemical properties that give it that, and it’s the fact that we have been, as humans, producing it for thousands of years, accumulating large stocks of it. So why is it that gold became money, not silver, not platinum, not copper, titanium, nickel, any of these other metals? It’s because the supply grows at a lower rate. Because it grows at a lower rate, the value that is placed in gold is diluted less. Because it is diluted less, people who save their money in gold end up increasing their wealth over time and becoming wealthier. So wealth will concentrate in gold, and people who use other inferior monies will lose them.

And the same way that happened with gold and metals, it will happen with Bitcoin and gold and fiat and metals. So as gold becomes better at holding on to value, gold appreciates more over time, and therefore it becomes better at holding on and moving value across space. Ultimately, money is a technology for moving value across time and across space. And gold became the world’s money because it was the best at moving value across time and across space. It’s not magic.

Now, because of these properties, it became money. So now if we discover something that does these things, that has these properties better than gold, then we would necessarily follow that that thing will displace gold’s monetary role. So when we look at the ability of gold to move value across time and we compare it to Bitcoin, we see why Bitcoin is decidedly the superior asset.

Bitcoin has what we in the industry call “number-go-up technology.” Bitcoin has two things built into it which gold does not have. Bitcoin has a halving and it has a difficulty adjustment. I know, Peter, these are difficult words, and I was a gold bug and I used to ignore those things because it’s just technical mumbo-jumbo. All those nerds, they don’t understand money, they don’t understand gold. But this matters, and it matters because annual production of gold is going to be somewhere in the range of about $700 billion this year. That’s the new production of gold, whereas Bitcoin production is only $12 billion. So that tells you something about the kind of new demand that is required for gold to maintain its current prices versus the new demand that is required for Bitcoin. Bitcoin is a lot less inflationary, and every 4 years the inflation rate drops by half.

First Round of Rebuttals

STEPHAN LIVERA: Thank you, Saifedean. So we’ve had our opening salvos. Now we’re going to have some rounds of rebuttal. These are no-interruption rounds. So Peter, you have 3 minutes uninterrupted to refute.

PETER SCHIFF: Yeah, well, first of all, none of that stock-to-flow stuff matters other than the fact that you have to start with the underlying value of gold, the use of gold as a commodity, as a metal. Because remember, money replaced barter, and under barter, people would exchange goods for other goods, right? If I am the butcher and I meet a baker, I can give him some meat and he’ll give me some bread, right? But what if the baker is a vegetarian? How am I going to get his bread? He has no desire for my meat.

So money became the commodity that was most readily accepted in exchange for all other commodities, and gold became that commodity, that money, because even if I didn’t need gold, even if I’m not a jeweler or I don’t make consumer electronics or aerospace, if I’m not somebody who needs gold for my business, it doesn’t matter, because I can hold it because somebody else will need it. I can trade it around because we all know that gold is widely acceptable and recognized as a good, that I don’t have to use it myself, but I can store it for somebody else to use it in the future.

The problem with Bitcoin is it doesn’t have any of that. Bitcoin is not a marketable commodity. It’s not a commodity. I don’t care what the CFTC says to regulate it. It doesn’t have any use. I can’t eat it, I can’t use it to drive my car, I can’t build a house out of it. It is nothing. And so since there is no underlying demand for Bitcoin, because there is no actual user for Bitcoin, there’s no floor to it. Bitcoin could go to nothing. It could collapse. All the demand for Bitcoin comes from speculators. People want Bitcoin because they think the price is going to go up. And if people stop believing the price is going to go up, then nobody wants it.

In case you guys haven’t noticed, the price ain’t going up, right? The price is starting to go down. And the lower it goes, the more people aren’t going to want it, and the more people who are going to want to sell it. If the price of gold goes down, people who need gold just buy more of it. Central banks need it. They’ll buy it if the price goes down. They need it to back up their currencies. There’s an entire industry that needs gold. And if they can get it cheaper, they’ll buy more of it.

Nobody needs Bitcoin for anything. Right now, the sole demand comes from speculators. Everybody in this room owns Bitcoin because they think the price is going to go up. If you knew that Bitcoin was going to be half its price or 25% of its price a year from now, you would get rid of it. The only reason you’re not getting rid of it is because you think you’re going to get rich.

STEPHAN LIVERA: 30 seconds.

PETER SCHIFF: Yeah.

STEPHAN LIVERA: Oh, you’re done?

PETER SCHIFF: Well, you just said— okay.

STEPHAN LIVERA: Yeah, yeah, I was just giving you a 30-second warning.

PETER SCHIFF: Oh, okay. That’s fine.

STEPHAN LIVERA: Yeah, yeah. If you want to—

PETER SCHIFF: Okay.

STEPHAN LIVERA: All right, thank you. Saifedean, you’ve got 3 minutes to respond.

Subjective Value, Gold’s Monetary Role, and Bitcoin’s Advantages

SAIFEDEAN AMMOUS: Yes. So this point that Peter keeps bringing up is astonishing from somebody whose biggest contribution is to talk about Austrian economics. One of the people who actually taught me about Austrian economics early on in 2007 and 2008, Peter Schiff. And one of the most important — in fact, the fundamental basic building block of all Austrian economics is the concept of subjective value.

All value is subjective, whether it’s gold, tomatoes, Bitcoin, bananas, whatever it is. People value it because they have placed subjective valuation on it, and that can happen for all sorts of reasons. And at a certain point, they placed a certain subjective valuation on this shiny yellow metal, and at a certain point they placed subjective valuation on this digital representation of value represented through private keys in a network that is decentralized, that is very robust, that allows you to send money internationally without having to go through intermediaries, which is something that nothing else allows you to do, and that creates demand for it.

So everything generates demand, generates value. The question is how it holds value. In your analysis, you said, “Well, gold was just this commodity that you could use as money.” Well, why was it gold? Why not nickel? Why not copper? Why not any of those things? Well, again, all of those things have subjective valuation. Only one of them has a limited supply growth rate, and that’s what Bitcoin has.

And because of that, we see, as I was saying earlier, the $700 billion worth of new gold that’s going to come onto the market at current prices. And that’s the problem with gold. The problem with the fact that they don’t have the difficulty adjustment and the halving means that no matter how high the price goes, the price eventually gets to the point where the new demand overwhelms the new supply, becomes so valuable because the price is high that it overwhelms the new demand, and then the price crashes.

And then once the price crashes, sentiment shifts, and then people dump their coins, and because they don’t have a difficulty adjustment, bear markets in gold can last decades. In 1980, gold hit $800, and it was only until 2008 or so until it hit $800 again. Are you willing to sit on your gold bags for 28 years to make a new all-time high?

Bitcoin, being advanced money, has a difficulty adjustment. If demand drops, if the price crashes, the difficulty adjustment ensures that miners can’t make more Bitcoin, and then the halving comes along to bail us out. And drop the supply by half and basically increase the price because if the demand had gone down, the supply goes down even further. Gold doesn’t have that, and so because it doesn’t have that, it doesn’t hold on to its value and its bull-bear markets can be much longer.

PETER SCHIFF: Let me respond to some of those points.

STEPHAN LIVERA: Okay, well, thank you, Saifedean. Peter, you have 3 minutes to respond.

Peter Schiff on Subjective Value and Gold’s Properties

PETER SCHIFF: First of all, the subjective value theory is not what you claim. Yes, it’s true that value is subjective, in that certain people value things more than others. As I said, what is the value of meat to a vegetarian? It’s not very much. But you cannot argue that there is no value there objectively. Air has value. Water has value. You can’t tell me that, well, it’s all subjective, maybe air is worthless. We need air to live. We need water to live. Water and air are abundant, so the price is not very high. Now, if you’re on a desert island, water could be very expensive if somebody offers you some.

But the fact of the matter is, gold has value. Whether you believe it or not, it objectively has value. Even if you don’t value it, other people do. And you can argue as to what the price should be, but the fact that it is a valuable metal — it is actually the most useful metal that exists. And the reason that gold is money and not copper and not nickel, although they’ve been used — I mean, pennies were made of copper, nickel was made of nickel, right? We could use those, but it’s not as good as gold.

Gold is better money than those other metals, which can also function as money, because gold endures indefinitely. The gold that we have was made during the Big Bang. It’s never going away. It doesn’t tarnish. It doesn’t decay. And if you look at the actual properties that gold has, other metals can’t do the things that you could do with gold. You can’t do with other metals. It has value unique to itself. And so gold beat out all those other types of money and other commodities.

Cattle was money, salt was money. That’s where they get “salary” — it’s from salt. So a lot of commodities have served as money. But over the years, humans have decided that gold was better. It was a free market competition for who has the best money.

Bitcoin is not even close to money. It’s not even being used as money. It’s never been used as money. Bitcoin is a collectible token. People collect Bitcoin, they trade Bitcoin, and they hope the price goes up. But it hasn’t been used as money in the past. It’s not going to be money in the future. And I think I addressed your point.

STEPHAN LIVERA: Excellent. Okay, we have one more round of uninterrupted time for Saifedean for 3 minutes, and then we’ll have it back and forth. So 3 minutes for Saifedean, uninterrupted.

Gold’s Failure to Monetize and Bitcoin’s Resilience

SAIFEDEAN AMMOUS: Yeah, so I was initially saying that the properties of money are its ability to move value across space and across time. I spoke about time, and I want to get to the second one, which is why gold can’t move value across space. Why Bitcoin is much better? Because it’s much cheaper to move around.

And this, I think, is an extremely important point because we’ve had much bigger bull runs in gold in the 1970s. And yet, even though gold went up something like 30x, it still did not monetize. And still in 1980, when with gold at $800, there was effectively no gold bank. This is the key point. There is no such thing as a gold bank in the world. Peter tried to do one and it got shut down. But there’s a reason for that. It’s not something that hasn’t occurred to anyone. Everybody knows that gold has a monetary role. Why isn’t there a single bank in the world that allows you to make an international payment with gold? Why can’t you just make a payment that you denominate in gold and send it internationally?

There are very good reasons for that. Governments have done a lot throughout the century to make sure this doesn’t happen. They’ve confiscated gold, they banned gold from moving, the IMF prevents countries from pegging their currencies to gold. There’s no such thing as a license for a bank that uses gold as money. You have to use your local government’s shitcoin in order to get a license for a bank. All of these things have effectively crippled gold’s monetary role, and nothing about this recent pump changes that.

Because in fact, if you look at it in the long term, the only reason this pump is so impressive is because gold’s performance has been so dogshit over the last 50 years that now it’s gone up basically back, reverted to mean, which is the rate of monetary expansion. Basically, at a 50-year rate, gold’s compound annual growth rate over the last 50 years is something like 8 or 9%, depending on where the analog Dogecoin is right now and its pumps and dumps as it experiences more volatility than Bitcoin, but it’s basically up 8% a year. That’s it. It’s 8-9% a year over 50 years. That’s basically just treading water with inflation because that’s the rate of the increase in the supply.

So it looks like, from the gold bugs, this looks like the apocalypse is $5,000 gold. How many newsletters over the past 3-4 decades have been written about what kind of apocalypse we’re going to experience when gold hits $5,000? And here we are, gold is $5,000, and it’s about as consequential as nickel or copper being worth $5,000. It’s just a commodity that’s gone up. It’s not going to materialize into a monetary system because governments will stop it from becoming money. And that’s why Bitcoin continues to be money, because governments cannot stop it from that role.

PETER SCHIFF: Well, first, a couple of points.

SAIFEDEAN AMMOUS: All right, come on.

Back and Forth: Tokenized Gold and the Case for Tether Gold

STEPHAN LIVERA: Okay, so now we’re going to go to a phase of back and forth. You guys can go back and forth with each other for — I’m going to call it for 10 minutes. All right, so Peter, do you want to start?

PETER SCHIFF: First of all, gold just hit $5,000 last week, so I think it is forecasting some bad things that are going to be happening. So you’ve got to let it play out. But I do think that we are seeing the early stages of the death throes of the fiat monetary system. I think that is what is happening, and gold is being remonetized, and it will be replacing the dollar.

But maybe you kind of missed my opening statement, when you’re talking about how it’s hard to send your gold around the world. You don’t have to. Did you not see the Tether Gold presentation that came on earlier today? I don’t have to send my gold anywhere. I could just leave some of my gold with Tether in their vault in a mountain in Switzerland where it’s nice and safe. I don’t have to transfer the gold. I’m not a jeweler. I don’t need the gold to use it as a metal. I just want to use it as a medium of exchange. I want to use it as money.

And so if you’re going to use gold as money, you don’t need to have physical possession of it. That’s the beauty of it. Once upon a time, we had banks that held our gold, or blacksmiths, and they gave us a piece of paper that was effectively an IOU for the gold. But we don’t have to do that now. We have something better. We have modern technology. We have the blockchain that you all love so much. We have the internet, so we have Tether Gold, which takes gold into the 21st century and allows me to send ownership of my gold — which is all that counts — anywhere in the world to settle any transaction I want. And I don’t need a bank. That’s the beauty. If you have Tether Gold, I don’t need a bank. I don’t need the bank to handle my payments. I can do the payments peer-to-peer. Everybody debanks. You all become your own bank.

And the problem with a bank is that you don’t even own the money that you deposit in the bank. You are a creditor of that bank. You have basically loaned the bank the money, and now they promise to give it back to you, but they could go out of business. Yeah, there are a lot of banks that have government insurance, but at the end of the day, you are a creditor of a financial institution when you have a bank account.

But when you keep your savings in Tether Gold, there is no bank. It’s just you. You own your money and you decide who you’re going to give it to. And when you earn money and you get paid in gold, it doesn’t get paid into your bank account. It gets paid directly to you. You’re bypassing the banks and just dealing directly with other individuals the same way you would if you were physically handing somebody any kind of currency. You can do it with Tether Gold because you don’t need to be in the same location. And you have the beauty of being able to break it down into tiny pieces. So you don’t need copper, you don’t need nickel, you can make micropayments and still use gold, whereas in the past we couldn’t do that because we had to use other metals.

The History of Gold-Backed Instruments

SAIFEDEAN AMMOUS: Yeah, well, the idea of producing gold-backed instruments that are used as a substitute for gold is not new, obviously, and is also something that many people have tried throughout the 20th century, and it has not worked. And it’s not worked not because it’s a bad idea — it’s a great idea.

PETER SCHIFF: Of course it worked.

SAIFEDEAN AMMOUS: No, it hasn’t worked.

PETER SCHIFF: What do you mean it’s never money?

The Switzerland Precedent and Gold’s Vulnerabilities

SAIFEDEAN AMMOUS: But why hasn’t it worked in the fiat era? And it’s specifically, I think, the interesting precedent here to look at is specifically Switzerland, because the idea behind Tether Gold and a lot of these businesses is that Switzerland is probably the country that has the best property rights in the world. It’s the country that was on a gold standard effectively the longest, and so therefore it’s the place where you would want to store your gold.

However, Switzerland is not really a sovereign nation, and I would really recommend reading a book called Gold Wars by a Swiss banker called Ferdinand Lipsch, which details the story of how Switzerland was effectively forced off of a gold standard because in the 1970s and ’80s what you are describing right now is effectively what was happening. Switzerland was effectively the country with the best monetary policy and the best currency and so everybody who had money in the world wanted to move their money to Switzerland to get a Swiss bank account and that was it. In the ’70s and ’80s a Swiss bank account was the real deal.

Then the ’90s come along and then the U.S. government and the Federal Reserve and the banking mafia essentially extorts Switzerland, force it to sell half of its gold, impose all kinds of draconian punishments over all kinds of made-up charges and nonsense, and eventually cripple the Swiss banking system. And now we see that the Swiss currency is effectively a proxy to the euro and the dollar, and it’s maintained to make sure that it—

PETER SCHIFF: Well, the dollar is at an all-time record low against the Swiss franc, so it’s doing a little bit better than the euro and the dollar.

SAIFEDEAN AMMOUS: Yes, but ultimately you still can’t get gold money used just because they have gold in Switzerland. And ultimately, I think, with any kind of gold-based system that is going to form a threat to the dollar, it is relatively straightforward to shut it down and prevent it from happening, like what happened with Switzerland in the 1970s.

What can resist this? A decentralized protocol where the digital coins themselves are not physical. There are no tanks that can come and confiscate it. It’s all digital. That’s a feature, that’s not a bug. We like the fact that you can’t drop it on your toes, that you can’t hear it when you drop it, that it doesn’t make a noise, that it doesn’t shine, because that means the government can’t take it, they can’t find it, they can’t confiscate it.

Gold’s History vs. Bitcoin’s Track Record

PETER SCHIFF: Well, look, gold has got 5,000 years of history where gold has been valuable. Bitcoin has a very short history.

SAIFEDEAN AMMOUS: 17.

PETER SCHIFF: Yeah, although most people didn’t know about it early on. I mean, it’s really been on the scene 5 years, 6, 7 years. I mean, there were only a handful of people that really knew about it back in its infancy. And during the time that Bitcoin has been around, there are now thousands, tens of thousands of alternative other cryptos that have properties similar, different, better than Bitcoin. There’s all these meme coins and other things that people can buy and NFTs and all kinds of digital things that have been created following Bitcoin that compete with Bitcoin.

And nobody knows what the future might hold in concocting these digital assets out of thin air. I mean, it’s rare that something that’s first is best or last and that isn’t being replaced, right? Gold can’t be replaced because gold is not created by man. Gold is here from God or, whatever it is, the Big Bang. We can’t make gold, but man made Bitcoin, and man can make something better than Bitcoin. Man can improve on it.

And I would say that one of the best improvements on Bitcoin is Tether Gold. That’s already an improvement because Tether Gold marries real gold with the blockchain. It takes what’s good about Bitcoin but eliminates what’s bad about it. What’s bad about it is that it’s nothing. The token itself is just a string of numbers that does absolutely nothing, that is irrelevant. And yes, you’re going to say, “Oh, I’m going to put my faith in Bitcoin.” How do you know that anybody’s even going to care about Bitcoin in 10 years, let alone 100 years? I know that in 100 years people are still going to value gold because humans have valued it for thousands of years. Why should they stop?

You have no way of knowing what, if anybody, is going to even care or remember Bitcoin other than as an example of the popular delusions and the madness of crowds. Maybe what Bitcoin has achieved in doing is replacing tulips, right, as an example of this kind of mania.

Tether Gold vs. Bitcoin: Inflation and Single Points of Failure

SAIFEDEAN AMMOUS: No, well, here’s the thing. What Tether Gold does is that it takes Bitcoin and it takes the two best things about Bitcoin and makes them worse. The best thing about Bitcoin is the low inflation. It gives it gold’s inflation, which is currently double Bitcoin’s inflation, and gold’s inflation is going to drop by— sorry, Bitcoin’s inflation is going to drop by half, whereas gold’s inflation is going to stay at around 2%.

And the second thing, it takes Bitcoin’s technology and adds to it a single point of failure where there’s something that you can attack to destroy the entire network. So in every conceivable metric, Tether Gold is inferior to Bitcoin. The only thing that it has going for it is that there are a lot of old people who refuse to get their heads around Bitcoin. They enjoy poverty, they enjoy continuing to talk about tulips, and for these people, perhaps— how is gold—

PETER SCHIFF: In what way is gold inferior to Bitcoin? I mean, if I had all the Bitcoin in the world—

SAIFEDEAN AMMOUS: Let me give you some numbers this year.

PETER SCHIFF: Wait, if I owned all 21 million Bitcoin, I wouldn’t have anything. It would have no value whatsoever if I owned it all. I mean, if I owned all the gold in the world, I’d be rich as hell. I’d have a monopoly on something that everybody needs. If I had all the Bitcoin, I’d have nothing.

SAIFEDEAN AMMOUS: You’re never going to get all the Bitcoin or all the gold, so this is a pretty moot point. Let’s stick to reality.

PETER SCHIFF: But the point is, it’s not better than gold. It is nothing.

SAIFEDEAN AMMOUS: No, it’s not.

PETER SCHIFF: It’s just—

SAIFEDEAN AMMOUS: Let me give you some numbers.

PETER SCHIFF: Gold’s annual production — there are 2.1 quadrillion satoshis. What the hell are they worth?

Comparing Supply Inflation: Gold vs. Bitcoin

SAIFEDEAN AMMOUS: Hang on. Gold’s annual production in 2026 is about 2% of supply, which is about 4,000 tons. There’s 4,000 tons coming onto the market, new gold, worth about $700 billion. That’s about 8 million Bitcoin. That’s 4 times the average of the value of the new mining output over the past 10 years. So in order to maintain the price over the next year, you need to get 4 times the demand that you had on average over the last 10 years.

By comparison with Bitcoin, it’s only $12 billion of new output that’s coming in because we only have 0.8% inflation. So we’re already at half the inflation, and in 3 years’ time or 2 years’ time, it’s going to be significantly less. So this means that the volume of new Bitcoin coming onto the market is 2% of the volume of new gold. There’s 50 times more gold coming on over the next year, and it’s just going to keep going up. If the price goes up, that means more — this is more inflationary. Bitcoin has the difficulty adjustment which prevents more Bitcoin from coming on.

PETER SCHIFF: Yes, assuming you accept the proposition that Bitcoin will never be hacked and the supply will be capped at 2.1 quadrillion satoshis, right? And assuming that you ignore all of the other cryptocurrencies that you could use instead of—

SAIFEDEAN AMMOUS: Gold has already been hacked. It’s already — we are living in a world in which gold has been hacked. Fiat money is the hack of gold. It’s already over.

Demand, Value, and the Price of Bitcoin

PETER SCHIFF: So the gold supply, you’re correct, increases historically about 2% per annum, which is about the increase in the population of the world. So it’s pretty stable as far as the amount of gold available per person. On the years that we were on a gold standard, prices declined. I mean, we had falling prices, so that inflation rate is acceptable because prices still decline over time. Relative to gold, and so we have prosperity.

But when you’re just looking at the supply and say, “Hey, the supply of Bitcoin is growing more slowly than the supply of gold,” maybe it is, but the key is the demand. The demand for Bitcoin can go to zero, and then what the hell? It doesn’t even matter what the supply is. There could be one Bitcoin, and if nobody wants it, it’s worth nothing.

Remember, Bitcoin only has a price. It doesn’t have any value, it has a price. And sure, everything can have a price. If there’s someone dumb enough to buy something, it’s going to have a price, right? P.T. Barnum said there’s a sucker born every minute. I mean, there’s a bunch of them in the audience here, right? And so as long as people are foolish enough to buy Bitcoin, it will have a price, but it will never have value. And at some point, people won’t want to buy it anymore, and then the supply is irrelevant. But you’ve been saying always—

Setting Price Thresholds: When Would You Admit You’re Wrong?

SAIFEDEAN AMMOUS: You’ve been saying this since Bitcoin was — what was the first time that you spoke about it?

PETER SCHIFF: Yes, yes, yes, of course, or something like that.

SAIFEDEAN AMMOUS: Yeah, you said it’s never going to hit $1,000, you said it’s never going to hit $10,000, you said it’s never going to hit $100,000.

PETER SCHIFF: I didn’t say—

SAIFEDEAN AMMOUS: Hitting them.

PETER SCHIFF: No, no.

SAIFEDEAN AMMOUS: So my challenge to you here, and I want to put you on the spot and ask you this: there is a number at which Bitcoin becomes the world’s dominant money. There’s a price for Bitcoin at which it is larger than all the other monies. There’s a price at which it’s larger than gold. There’s a price at which it’s larger than all the other monies combined. If it hits that price, will you finally admit that this is a form of money?

PETER SCHIFF: I have been critical of Bitcoin since it was around a dollar. Yes, but I knew about it before most of you in this audience had any idea that it existed. But I never said it couldn’t go to $5,000 or $10,000. In fact, one day I remember saying Bitcoin can go to $50,000 when it was $5,000. I said, “I don’t care.”

The only price point that I went out on a limb and I said it would never hit was $100,000. And when I said that, it was because it had fallen from $69,000 down to like $15,000, and I thought that it had peaked. And I believe that had Donald Trump not been elected, Bitcoin never would have hit $100,000. Yeah, I think it was only Trump. Now the question is, will it ever hit $100,000 again? I don’t know. Gold might beat Bitcoin to $100,000. We’ll see.

But what I would ask in reverse, it’s not how high Bitcoin is going to go, because clearly it doesn’t matter to me. If I was negative on Bitcoin at a dollar and it went to $100,000, it’s not about price for me, right? Price is irrelevant. It could go—

SAIFEDEAN AMMOUS: The only relevant thing is price because it determines the total market cap, the capitalization. It’s essentially the addressable money.

PETER SCHIFF: But I’m going to hold you to that. So at what point on the way down will you admit I was wrong and get rid of your Bitcoin?

SAIFEDEAN AMMOUS: Oh, always. There’s always a number.

PETER SCHIFF: What’s your price? How low?

SAIFEDEAN AMMOUS: Currently it’s about $12,000 to $15,000.

PETER SCHIFF: So if Bitcoin goes to $15,000, you’re going to sell all your Bitcoin and admit you were wrong?

SAIFEDEAN AMMOUS: I would say, yeah, that would undermine the case for Bitcoin.

PETER SCHIFF: All right, well, maybe next year at this conference you won’t have any more Bitcoin.

SAIFEDEAN AMMOUS: Maybe.

PETER SCHIFF: But when you sell it, make sure you get some Tether Gold.

SAIFEDEAN AMMOUS: Listen, I’ve always had this number. I’ve always had a number at which my thesis is wrong. If we wake up tomorrow and Bitcoin is $50, I’m sorry for everybody who bought my book. I messed up. It was wrong. There’s no way around it. But there has to be a number for you at which—

Closing Arguments

PETER SCHIFF: No, no, because to me it’s not— to me, okay, what I’ve always said, if I wake up one day in a world of hyper-Bitcoinization, right, where Bitcoin is money and everybody’s walking around — I went into a restaurant with Anthony Pompliano and his brother, and we had some food, and when the waitress came, I said, “Do you take Bitcoin?” And she laughed. She didn’t even know what it— No, no, they didn’t take it.

But if I wake up and everything is priced in Bitcoin, salaries are in Bitcoin, insurance policies are in Bitcoin, if the whole world is using Bitcoin as money, I guess I was wrong, right? But to me, it’s about real adoption. Not when you guys talk about adoption — you talk about people buying it to speculate on it. I think about it as being used as money, not as a speculative tool.

Most people today are buying Bitcoin to get more dollars. They buy it for $70,000 and they want to sell it for a million dollars. They want more dollars and Bitcoin is a vehicle to do that. That’s why so much of the Bitcoin is owned through ETFs or through these other companies — because it’s used for speculation. So for me, it’s not about price, but for you it is. And so price is going to be the determining factor.

And so when Bitcoin goes to $15,000, which it will go to — I mean, that’s pretty much a lock. Because even if I wanted to buy Bitcoin, and my advice to the people in this room is of course not to buy it at all, but if you want to buy it, sell what you got now and wait for Strategy to go bankrupt and wait for every last Satoshi that Strategy owns to be liquidated by its creditors, and then you can buy some. But the price is going to be much, much lower.

Now, if you want to ride it down now, that’s up to you. But in the meantime, what you lose in Bitcoin — it’s not just watching Bitcoin go from $70,000 to $10,000 and losing that. It’s watching gold go from $5,000 to $20,000, and you don’t own any of that. So it’s not just what you lose in Bitcoin, but what you don’t gain because you didn’t buy gold, or you didn’t buy silver, or anything else.

MicroStrategy has been buying Bitcoin now for 5 years, and last I checked, his total gain on his position is less than 4%. 4%! Buying Bitcoin. $54 billion wasted buying Bitcoin. He would have been better off with money market. Money market. Imagine if Strategy bought gold or silver — how much better off the company would be. All they got is Bitcoin. And if Strategy had bought gold, they could sell it. Strategy could sell $54 billion worth of gold in a day. If Strategy tried to sell their Bitcoin, it would be at $15,000 and you’d be out.

SAIFEDEAN AMMOUS: No, this idea that Strategy is this threat to Bitcoin is ridiculous. Strategy is at most a threat to its own shareholders. It’s not as if it’s just Michael Saylor buying all of these coins — it’s shareholders who are buying those coins. And if those people weren’t buying Strategy, they’d be buying Bitcoin.

PETER SCHIFF: I don’t know about that. It’s a different animal. Strategy buyers are not necessarily people that want Bitcoin.

SAIFEDEAN AMMOUS: Yeah, but the point is, when you’re thinking about gold, one point you ignore is that gold is already a massive monetary asset. It’s already what now, something like $30 trillion total market capitalization. That’s about 15 to 20 times larger than what Bitcoin is. Now of course that means more liquidity, and yet even with such a large size of money, we still don’t see gold being used as money — because of the fact that it’s very difficult to use. And so therefore—

PETER SCHIFF: That’s going to change with Tether, though. No, it’s the whole point. Yes.

SAIFEDEAN AMMOUS: No, because if it was going to change, then it would—

PETER SCHIFF: It will change. The reason that people— the reason—

SAIFEDEAN AMMOUS: The point I’m trying to make here is that there’s a limit to the kind of room that gold has to grow, because people can’t use gold to truly replace their cash.

PETER SCHIFF: Yes, they can.

SAIFEDEAN AMMOUS: No, they cannot, because they need to continue to use fiat for their transactions.

PETER SCHIFF: No, they don’t need to. They choose to.

SAIFEDEAN AMMOUS: And they can’t continue to use gold, so they need to continue to operate within the banking system, within their government’s rules, within all of those things, which is going to force them into a state of fiat. And therefore they’re going to have to convert in and out of gold with every transaction.

Hang on a second, please. I’ll let you finish. You need to get in and out of gold, so there’s always a transaction cost which prevents it from being liquid, which massively compromises its salability. And therefore that means that there’s a limit to how much the market cap can grow. So it’s already $30 trillion. That’s probably more than 10% of all the world’s balances — it’s probably more than all of the world’s cash balances, which I count as all of the world’s fiat currencies plus gold plus Treasury bonds plus government bonds. So it’s already more than 10% of that. So even in the best-case scenario, the best thing that it can do is just another 10x, at which point it would eat everything.

Closing Statements

STEPHAN LIVERA: All right, sorry, we’re going to have to go to closing statements now, otherwise we’re going to run out of time. Peter, can you take 2 minutes unbroken? This is your closing statement — 2 minutes please.

PETER SCHIFF: There are a lot of points there that I want to address. But first of all, gold was $20 an ounce and now it’s $5,000. It could be millions of dollars. How much is it in Zimbabwe? It all depends on how much fiat currency we print. With hyperinflation, gold actually doesn’t go anywhere. Gold just stays the same — it’s just all these fiat currencies go down.

But the reason that people haven’t been using gold as money is because it hasn’t been as convenient. It’s much easier to use dollars or euros or yen or pounds. But the problem with those currencies is that they don’t store value by design. Now you have central bankers that are committed — they’re telling us that their goal is for our money to lose at least 2% of its value every year as a baseline, and it might lose more.

So I think more and more people are going to want to find an alternative to a rapidly depreciating currency. And now that you have blockchain and the type of technology that makes Tether Gold possible, we can make using gold more convenient so you can avoid having to lose purchasing power.

Right now people accept the loss of purchasing power as a trade-off for convenience. But as the loss of purchasing power grows, and as the convenience of using dollars is no longer a big advantage over using gold — because Tether Gold makes it much more convenient — more and more people will move. Just like people went from cabs to Ubers, or they went from the post office to FedEx, they’ll go from the dollar, the euro, the pound, to gold through Tether Gold.

STEPHAN LIVERA: Thank you, Peter. Saifedean, you have 2 minutes. Let’s finish it off.

SAIFEDEAN AMMOUS: Thank you, Peter, for delivering my punchline. Yes, gold does not go up in value. It basically stays constant in value, and when the number is going up, it’s just the fiat that’s devaluing. And I think that’s an important point — because essentially you’re not really making gains when you’re holding gold, you’re just preserving your wealth.

Whereas with Bitcoin, you have a truly revolutionary, exciting, and world-transforming technology that is going up at a very different rate. Gold has been at around 8, 9, or 10% or so over the past 50 years compound annual growth rate. Bitcoin’s first 15 years — 120% or something like that, as an annual rate per year. It’s incomparable, and it’s going to continue to go up because it’s going from zero to eating all of the world’s cash balances.

It’s an incredible opportunity for people to get into as an investment, as well as an incredible transformation of the technology that we as humanity use for money. So it offers us something that is just far more good for us as human beings than just going back to the same gold that is already at $30 trillion, and is already essentially immobile and unusable, and is extremely vulnerable — handicapped and paralyzed essentially by governments for many, many decades, throughout the century.

It would be great if we could go on a gold standard. I would love nothing more. Well, I would love one thing more, obviously — a Bitcoin standard. But it unfortunately is just not going to happen. There are technological reasons why gold is no longer being used as money. There are reasons that make it vulnerable to government attack. Bitcoin is the solution to the failures of gold, not another return to gold.

PETER SCHIFF: Gold doesn’t have any failures.

STEPHAN LIVERA: Well, that’s all we have time for, everybody. Please put your hands together for Peter Schiff and for Saifedean.

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