Bitcoin "Ponzi" Running Out of Buyers, Price Could Hit $1,000: Schiff 12

Bitcoin “Ponzi” Running Out of Buyers, Price Could Hit $1,000: Schiff

For the longest time, critics of Bitcoin have questioned if the cryptocurrency is a Ponzi-like/pyramid scheme.

Wikipedia defines a “Ponzi scheme”: A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

While this is rather ambiguous, critics say that this applies to Bitcoin, for the cryptocurrency, due to the inflationary pressures of block rewards and such, requires constant capital input for prices to maintain their current levels of grow. The idea the critics that believe Bitcoin is a Ponzi tout is that without fresh capital, this market would collapse, much like a pyramid scheme would if new investors stopped entering the pyramid.

Peter Schiff, a prominent gold proponent and libertarian investor (someone that would like Bitcoin’s seeming premise in another reality), recently quipped that Bitcoin is only “popular as a speculative asset, not as a currency,” before going as far as to say that as Google Trends shows, BTC is “running out of new buyers to keep the Ponzi going.”

This comes shortly after he claimed that Bitcoin could hit $1,000. 

Bitcoin Not a Ponzi Scheme, Though There are Bitcoin Ponzi Schemes

While Bitcoin itself likely isn’t categorically a Ponzi scheme, there are Ponzi schemes that have leveraged Bitcoin for ill gain. It’s not surprising really…

There’s PlusToken, a cryptocurrency scam focused on the Asian market that Primitive Ventures’ Dovey Wan claims to have stolen some 200,000 Bitcoin, 800,000 Ethereum, and a mass of other cryptocurrencies from victims.

The scam was a “wallet” that promised returns on deposits, which is obviously too good to be true. Earlier this year, a number of ringleaders of the operation were arrested in Vanuatu, though a few individuals remain missing abroad, though they are likely being pursued by global authorities due to the size of the booty stolen.

And there’s also OneCoin, a Ponzi scheme that is much similar to PlusToken. Authorities are currently pursuing the founders of the scheme, which analysts also say managed to defraud cryptocurrency industry members of millions.

Analysts have found that these scams have been pushing the cryptocurrency market lower. On-chain analyst Ergo recently noted that the remaining operators of the PlusToken scheme have been liquidating and shuffling over 187,000 coins — now valued at $1.4 billion. He added that PlusToken is likely selling “a little over 1,100 BTC per day,” which is approximately 60% of the daily block rewards issued by the Bitcoin network.

If PlusToken and other scams have really been liquidating millions of dollars worth of Bitcoin a day, that would explain why the leading cryptocurrency’s price has bled out by some 50% over the past six months.

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