Renowned economist and staunch gold advocate Peter Schiff is once again warning of an impending catastrophe. However, unlike mainstream fears, he believes the trigger for a global collapse will not be Bitcoin, but a crash in the U.S. Treasury bond market.
In his recent analysis, Schiff points to the rapid rise in yields on 10-year and 30-year Treasury bonds. The former are already approaching the 4.5% mark, while the latter have nearly reached 5%. In his view, this is just the beginning — yields will continue to rise, making borrowing prohibitively expensive for all market participants.
Chain Reaction: From Bonds to Real Estate and Stocks
Schiff predicts that the rising cost of borrowing will immediately hit the stock and real estate markets. The average rate on a 30-year mortgage in the U.S. has already reached 6.49%, pushing a significant portion of potential buyers out of the market. This, in turn, will exacerbate the downturn in the real estate sector and, according to the analyst, will force the Federal Reserve to intervene by launching new cycles of money printing, triggering another wave of inflation.
In both scenarios, Schiff is confident that gold will remain the winning asset. The precious metal is already trading above $4,100 per ounce, showing a confident recovery after the June decline.
Bitcoin Will Not Hold: Schiff Predicts a Drop to $20,000
As for Bitcoin, Schiff's forecast is extremely pessimistic. Despite the leading cryptocurrency holding around $62,000, its price is still nearly 49% below its all-time high. According to the expert, this clearly proves that BTC does not function as a safe-haven asset. He is convinced that as soon as the technology sector and stock market begin to fall, Bitcoin will crash even harder.
"When tech stocks go down, Bitcoin will follow. It has no correlation in a rising market, but in a falling market, it shows even weaker performance," the analyst emphasized.
Schiff pays special attention to the company Strategy (MicroStrategy), which is the largest corporate holder of Bitcoin. He has repeatedly warned that its model, based on issuing debt to buy BTC, could collapse. The company has already started selling Bitcoin to pay dividends, which Schiff sees as a worrying signal. He does not rule out that in the event of a major crisis, the price of Bitcoin could crash to $20,000.
My analysis confirms that Schiff's arguments about an overheated bond market have serious merit. Rising yields are a systemic risk that could indeed act as a trigger for a correction across all risky assets, including cryptocurrencies. In the current environment, gold looks like a more reliable tool for conservative investors, while Bitcoin continues to show a high correlation with the technology sector, making it extremely vulnerable.