Trump is the King of Tulips? Peter Schiff Compares the Cryptocurrency Craze to the 'Madness' of the 17th Century

The gold evangelist Peter Schiff is getting angry with Bitcoin — and he blames President Donald Trump for hiding a "decentralized Ponzi scheme" under the American flag. Schiff argues that Trump's support for cryptocurrency is accelerating the collapse of the dollar while creating a false legitimacy around digital assets. Schiff posted on X that: "By promoting domestic investment in Bitcoin and cryptocurrencies, Trump is contributing to weakening the American economy and accelerating the collapse of the dollar."

He predicts that while initial Bitcoin supporters may celebrate the weakening of the dollar, gold will ultimately benefit because "Bitcoin will also collapse." 'Decentralized Ponzi Scheme' Schiff dismisses recent cryptocurrency bills as an effort to "disguise Bitcoin - nothing more than a decentralized Ponzi scheme - under a legal guise." He accused those in the industry of using the law to inflate digital assets while planning to exit at higher prices. "This industry is exploiting them to inflate Bitcoin and other cryptocurrencies, allowing insiders to cash out at higher prices. This is a legislative weakness," Schiff wrote. The economist's criticism also extends to initiatives regarding stablecoins, which he views as ineffective tools for maintaining the dominance of the dollar. Schiff argues that stablecoins can be backed by any fiat currency and do not provide the inherent stability advantage. "The exaggerated claims that stablecoins will help reinforce the dominance of the US dollar in global trade are completely absurd," Schiff declared. He emphasized that stablecoins pegged to the dollar are only as stable as the underlying currency, while warning that "that 'stability' will soon fade away." 'Crowd Madness' Schiff cited Charles Mackay's work "Extraordinary Popular Delusions and the Madness of Crowds" to compare Bitcoin and digital assets to the Dutch tulip bubble. He quoted Mackay's remark that "every era has its own madness" and identified digital tokens as the illusion of the current age. Schiff quoted: "They go crazy in packs, and only gradually regain their sanity, one by one."

The Dutch tulip bulb bubble of the 1630s was a speculative frenzy, during which the prices of tulip bulbs skyrocketed to an all-time high before collapsing overnight, leaving many investors with worthless contracts. Often regarded as the first recorded financial bubble, it has become a lasting symbol of irrational market exuberance. Schiff notes that Dutch society once neglected conventional industries to focus on tulip trading and draws direct parallels to the adoption of Bitcoin. Schiff concluded: "Just replace tulip flowers with Bitcoin and that's it." The warnings from this economist indicate his deeper skepticism about monetary systems not backed by gold and his belief that cryptocurrencies represent dangerous speculation that distracts from sound economic policy.