Why Bitcoin & Stocks Face a 2008-Style Crash | Peter Schiff

**Ran Neuner** (0:00)
Do you believe that we're in an AI bubble? I know you called the 2008 bubble spot on.

**Peter Schiff** (0:05)
There's no doubt in my mind that AI stocks are in a bubble.

**Ran Neuner** (0:09)
And now you've got the world's biggest Bitcoin holder basically leveraged, and we know how much the market hates leverage. At some point, the market just flashes out the leverage.

**Peter Schiff** (0:16)
If the biggest buyer of Bitcoin can't buy anymore, the biggest buyer is going to become the biggest seller. There's going to be incredible pressure on sailors.

**Ran Neuner** (0:24)
So don't you think that the markets maybe got this all wrong that maybe the next move by the Fed will actually be a rate cut?

**Peter Schiff** (0:30)
Inflation isn't oil prices going up. It's not any prices going up. It's the money supply expanding. If Orsh was going to hike rates, why didn't he do it at the first meeting? Why didn't he come out with a hike?

**Ran Neuner** (0:40)
Looking in the next six months, what are your top three concerns at the moment?

**Peter Schiff** (0:43)
A lot of bad things are going to happen. The big concerns are...

**Ran Neuner** (0:49)
Peter Schiff may have extreme views about crypto, but the reality is that when you sit down and speak to him, you realize that his views on everything else are pretty much the same as ours. The only thing is that his end point is gold and that our end point is usually Bitcoin or crypto, or at least for some of us who still have conviction in this game. But if you dig beneath the surface, you'll realize that Peter has really really good views. In fact, he called the 2008 housing collapse right at the very top and he made a lot of money on the way down. He also called gold when everyone said it wasn't investable. And well, look at the gold chart. He's made a ton of money actually investing in gold. Today, he thinks that A, we're in an AI bubble, B, that the Fed is already making mistakes, and C, that Michael Saylor is about to destroy Bitcoin. I managed to get Peter for a couple of hours this week and here's the conversation. It was absolutely, absolutely fascinating. And the one thing I said to myself is, I know we don't agree about crypto. I know we don't agree about Bitcoin. And I'm going to do my very, very, very best not to speak to him about it.
And this is how it went. So I promised myself that today, I wouldn't talk to Peter about crypto. And I'm going to do my very best not to talk to Peter about crypto today. And I'm going to really do my best, because every time we talk about crypto, we seem to disagree. And it's really the only thing that we disagree on. And so I promised myself, we wouldn't talk about crypto today. But there is one crypto story that I actually do want to talk about today. And I know you've been very vocal about this one. And that's been the story about STRC, which actually today hit $73.57.
Now, this is the preference share that Michael Saylor issued, which is supposed to be, I want to use the word pegged, but you can't peg a pref share at 100 At the same time, you've got the MicroStrategy share now at 87.71.
What do you make of the STRC? I mean, how do you describe it?

**Peter Schiff** (2:34)
Well, I described it as a Ponzi scheme, and that's pretty much what it is. But strategy is in a lot of trouble right now as an entity. And I've been saying for a long time that I do expect the company to ultimately go bankrupt, and that's pretty much what's going to happen. But in the near term, Saylor has put himself in a very precarious situation.
You know, initially, the business model of strategy was generating positive Bitcoin yield. The way it did that was it was able to sell shares of the company at a big premium, because investors were, for whatever reason, willing to pay a premium to own strategy. And so strategy could sell stock. And then let's say the book value or the value of the Bitcoin per share is a dollar, and it sells the stock for $1.50. And then it takes the $1.50 and it buys Bitcoin. And so even though it was issuing new stock, the Bitcoin per share kept going up because the stock was being sold at a premium, to what it had to pay to go into the market and buy the discount.