A live financial debate took place in Dubai at Binance Blockchain Week, where Changpeng “CZ” Zhao and Peter Schiff faced off to discuss whether Bitcoin is superior to gold.
Following initial pleasantries, CZ directly challenged Peter's reliance on "tokenized gold," asserting that it is overly dependent on trust and centralized control.
Peter Schiff began the discussion by reiterating his stance, dismissing Bitcoin as merely a "speculative asset" devoid of intrinsic value. He stated, "What makes Bitcoin worthless, as far as I’m concerned, is not the fact that I can’t touch it. It’s that you can’t do anything with it. It doesn’t have utility beyond the fact that… I can transfer it to you, and you can transfer it to somebody else." Schiff emphasized that Bitcoin lacks any real function, likening it to a game of hot potato.
Schiff then pivoted to his preferred asset, tokenized gold, arguing, "When I transfer tokenized gold to you, I’ve transferred gold. I’ve transferred the ownership of the gold." He identified the "actual transfer of ownership" as a key issue with Bitcoin.
In response, CZ presented a piece of physical gold, highlighting its portability challenges across borders. He contrasted this with Bitcoin, noting, "Whereas Bitcoin… has actually gone up in value over the last 15 years."
Peter Schiff Accuses Binance of Operating a Casino
Peter Schiff intensified his critique, characterizing Bitcoin as a large-scale gamble. He remarked, "More people are gambling in Bitcoin today than were gambling in it a couple of years ago," portraying it as a risky venture rather than a serious asset. Schiff then directly addressed CZ, stating, "You’re running a pretty big casino."
Schiff presented data to support his claims, asserting, "Bitcoin today buys 40% fewer ounces of gold than it did four years ago," suggesting a decline in Bitcoin's value relative to gold. He listed various factors that have contributed to Bitcoin's hype over the years, including ETFs, celebrity endorsements, the NFT craze, and El Salvador's adoption, concluding, "We’ve had all of this promotion… and the price has gone down." Schiff's central argument was that the excitement surrounding Bitcoin had not translated into tangible results.
CZ countered Schiff's assertions by pointing out that virtual items frequently possess real value. He explained, "When you use X, X is completely virtual. There’s nothing physical about it. But X has value. The Internet is virtual… but it has value." CZ emphasized that Bitcoin's value stems from its portability and global accessibility, especially when compared to gold. Addressing Schiff's "casino" comment, CZ retorted, "When you reach this level of like hundreds of millions of people, it’s no longer a casino."
Schiff Criticizes Michael Saylor and MicroStrategy's Bitcoin Strategy
Peter Schiff extended his criticism to include Michael Saylor and MicroStrategy's debt-financed Bitcoin acquisitions. Schiff stated, "Michael Saylor is coming out here; Bitcoin is going to be $10 million a Bitcoin. Well, why isn’t it there now? If it’s really that valuable, the market would adjust the price now." He questioned why the market had not already reflected such a valuation.
Schiff also scrutinized MicroStrategy's approach to building its Bitcoin holdings, noting, "We got… Strategy that borrowed $40 billion to buy Bitcoin, or issued stock and debt to buy $40 billion." According to Schiff, this leveraged approach artificially inflated the price. He mockingly characterized Saylor's confidence as suggesting, "It’s a sure thing. Go out, mortgage your house… put everything you have."
Schiff reiterated his preference for gold, promoting his tokenized-gold project. He explained, "Right now… you can buy physical gold and silver, and we store it for you… it’s allocated gold." His proposition was that a reputable private firm could tokenize real gold, eliminating the need for government backing. He argued, "Any private entity that has a good reputation and is trustworthy can tokenize gold… they’re all fungible because gold is gold."
In his concluding remarks, Schiff predicted that younger generations would eventually favor gold over Bitcoin due to potential financial losses in Bitcoin. CZ responded by citing adoption figures, stating, "Three hundred million people on Binance alone all have some kind of Bitcoin."
This exchange marked a significant moment in the ongoing debate between Bitcoin and gold proponents.