Immediately with the announcement of the U.S.’s May 2022 inflation report with CPI at 8.6 percent, the crypto market was hit hard. Bitcoin and other cryptos have fallen by another 5% today, bringing the whole market closer to $1 trillion.
Bitcoin (BTC) is now trading at a price of $28,109 with a market capitalization of $613 billion at the time of this writing. There has been a rise in selling pressure in crypto as the likelihood of a US recession grows. In light of recent events, Bitcoin skeptic Peter Schiff is issuing a dire warning to investors. In the next weeks, he expects a large drop in the number of Bitcoin HODLers. Schiff stated:
Many Bitcoin HODLers will be compelled to sell because of rising food and energy costs. For example, you cannot use Bitcoin to pay for anything in a grocery shop or petrol station. No one needed to sell when Bitcoin plummeted during #Covid. #HODLers received stimulus cheques as a result of decreasing consumer costs.
For the last month of May 2022, the United States reported higher-than-expected jobless claims. Schiff predicts that as the recession tightens its hold on the market, the demand for BTC will only grow. He added that when the crisis worsens and more #HODLers lose their jobs, particularly those working for soon-to-be bankrupt #blockchain firms, the necessity to sell Bitcoin to pay the bills will only become worse. Long-term purchasers who don’t have a steady source of income will be obliged to sell if the situation changes.
One of Schiff’s Twitter followers said that in the event of a personal financial disaster, he would not sell gold or liquidate any other asset. Schiff predicts that only a small percentage of Gold investors will find themselves in such a predicament.
According to him, even if some stores decide to sell their gold, there will be enough demand from other investors as well as industry and central banks to cover the losses. Schiff, on the other hand, isn’t exactly correct in his prediction that Bitcoin won’t find enough purchasers. Amidst the fall in BTC price this year, Bitcoin whales have been steadily increasing their holdings.