Financial commentator and Bitcoin critic Peter Schiff recently reignited controversy within the cryptocurrency community by criticizing Bitcoin exchange-traded funds (ETFs).

Schiff argued that investing in Bitcoin ETFs undermines the very principles of Bitcoin, a view that surprisingly found support from Charles Hoskinson, founder of Cardano.

Schiff’s Argument

Peter Schiff’s argument centers on the belief that Bitcoin ETFs erode Bitcoin’s decentralization and peer-to-peer nature. He stressed that with ETFs, Bitcoin is no longer decentralized, can be easily seized by authorities, cannot be used as a currency for payments, and cannot be transferred across borders.

Schiff further emphasized the security risks associated with holding Bitcoin through ETFs, stating that investors do not truly own their Bitcoin if they do not hold their private keys. Additionally, he criticized the motivations of new investors, suggesting that they only care about the price and aim to cash out with profits, which, according to him, signals the potential collapse of Bitcoin as a pyramid scheme.

Interestingly, Schiff’s criticism of Bitcoin this time gains widespread approval from crypto community members.

Cardano Founder Agrees

For instance, Charles Hoskinson, co-founder of Input Output Global, expressed agreement with Schiff’s assessment, saying “Peter is making a cogent point about Bitcoin.”

Peter is making a cogent point about Bitcoin… pic.twitter.com/BhbXhmiVT0

— Charles Hoskinson (@IOHK_Charles) August 8, 2024

Also, Crypto Rover, a famous crypto YouTuber and podcaster Peter McUnburdened, acknowledged the validity of Schiff’s arguments. Other community members also expressed agreement that many investors are using Bitcoin merely to make money, not for its technological benefits.

Eric Balchunas, Senior ETF Analyst for Bloomberg, also weighed in, saying “It’s a fair point.” However, he compared Bitcoin ETFs to gold ETFs or mutual funds and questioned the perceived difference in holding assets through these financial instruments.

Peter Schiff’s latest remarks follow his previous criticism of Donald Trump’s support for Bitcoin, which Schiff claimed was a strategic move to garner votes and contributions from the crypto community. Schiff asserted that Trump’s promises to make Bitcoin a reserve asset would remain unfulfilled.