Banks Prefer Gold Over Bitcoin, Says Peter Schiff

Highlights:

• Schiff warns rising interest rates could trigger major losses for Bitcoin investors.
• Central banks worldwide are boosting their gold holdings, reflecting declining confidence in Bitcoin.
• US markets decline across stocks, bonds, and the dollar; gold and silver gain.

Peter Schiff, a well-known critic of Bitcoin, has once again shared his opinion on the ongoing debate between gold and Bitcoin (BTC). In a recent post on X (formerly Twitter), he repeated his belief that gold is the better choice. He pointed out that more and more foreign central banks are choosing to hold gold as a reserve, showing their trust in gold over Bitcoin.

Schiff believes the rising use of gold as a reserve shows its lasting importance in the world economy. In a separate post, he warned that many Americans are buying Bitcoin at high prices. He says they hold about half of the world’s Bitcoin and 40% of the supply, which could lead to big losses if others begin selling.

In his thread, Schiff stated:

If gold is the past and Bitcoin is the future, why are foreign central banks that are preparing for a future where the U.S. dollar is no longer the reserve currency, replacing their dollar reserves with gold and not Bitcoin?

Peter Schiff says the fact that more countries are using gold as a reserve shows its lasting value in the global financial system. 

If gold is the past and Bitcoin is the future, why are foreign central banks that are preparing for a future where the U.S. dollar is no longer the reserve currency, replacing their dollar reserves with gold and not Bitcoin?

— Peter Schiff (@PeterSchiff) May 24, 2025

Schiff Warns of Crypto Crash

Peter Schiff criticized crypto and tech investors, calling them “ignorant” for overlooking rising interest rate risks. Even though Bitcoin recently hit a new high of $111,000, he still strongly opposes it. He warned that Bitcoin is a dangerous trap and said that as interest rates keep rising, it’s only a matter of time before crypto crashes.

Schiff shared worries about the US financial markets. This week, the dollar index dropped nearly 2%, finishing just above 99. US bond yields increased, with 10-year notes surpassing 4.5% and 30-year bonds exceeding 5%. He cautioned that bond prices might fall further next week. The week was tough for US stocks. The S&P 500 fell by about 2.5%. The dollar, stocks, and bonds all dropped. But gold and silver went up.

Central Banks Build Up Gold Reserves

Because of US President Donald Trump’s tariff rules and the dollar losing value, global central banks are buying more gold to spread out their reserves. Russia’s invasion of Ukraine in 2022 also helped increase the demand for gold. A Reuters report said that this year, central banks may be buying the most gold in many decades. After Russia’s invasion, central banks doubled gold buys to over 1,000 tons a year.

BofA strategist Michael Widmer said:

“Emerging market central banks currently hold around 10% of their assets in gold. They should really hold 30% of their assets in gold.”

Russia’s central bank is one of the biggest gold holders, buying gold from 2014 to 2020 to protect itself from Western sanctions. Right now, gold costs $3,357.40 per ounce, up 1.82% today but down 1.12% this month. Bitcoin is $108,610, down 1.31% today but up 17% this month. Schiff says that even with the recent rise, Bitcoin doesn’t offer the long-term safety central banks need.