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As the Federal Reserve prepares for its September 17 policy meeting, longtime Bitcoin critic Peter Schiff has warned that Bitcoin topping out could occur before the central bank announces its widely expected rate cut. Despite posting a 4% weekly gain, Bitcoin has failed to sustain momentum above $116,000, suggesting strong resistance that could limit further upside.
“Bitcoin has not broken through critical resistance, and that signals weakness,” — Peter Schiff, CEO of Euro Pacific Asset Management, said in a recent market commentary. “With gold and silver rising, I believe we are seeing Bitcoin topping out before the Fed’s move.”
Schiff emphasized that Bitcoin remains 15% below its 2021 peak when priced in gold, underscoring what he describes as the cryptocurrency’s inability to act as a reliable store of value compared to precious metals. For investors watching the Fed, the warning about Bitcoin topping out raises questions about whether the crypto market can weather the macroeconomic uncertainty ahead.
The Federal Reserve is widely expected to cut rates by at least 25 basis points during its upcoming meeting. While some traders view lower borrowing costs as supportive of risk assets, Schiff maintains a different outlook. He argues that cutting rates in the face of persistent inflation may damage economic stability and weigh on speculative markets.
“Rate cuts are often misunderstood as bullish for risk assets, but history shows the opposite in the short run,” — Ted Pillows, senior market analyst at Capital Metrics, told Bloomberg Markets. “We’ve seen equities stumble after cuts, and the same risks apply here, with Bitcoin topping out potentially ahead of schedule.”
Historical data indicates that U.S. equities often underperform immediately following the first rate cut in a cycle. While Bitcoin has occasionally diverged from stock market behavior, Schiff insists that investor caution will favor traditional safe havens. His warning about Bitcoin topping out aligns with this pattern of heightened volatility during monetary policy shifts.
While Bitcoin wrestles with resistance, gold and silver have advanced in recent weeks, highlighting a renewed preference for safe-haven assets. Analysts attribute the metals’ resilience to rising concerns about inflation, geopolitical risks, and the credibility of central banks’ policy responses.
“Gold has outperformed Bitcoin consistently in times of uncertainty,” — Schiff said. “Silver, too, is showing strength, proving once again why investors should trust time-tested stores of value over speculative digital tokens.”
For Schiff, the narrative of Bitcoin topping out reinforces his longstanding argument that cryptocurrencies lack the intrinsic qualities of precious metals. The relative strength of gold and silver, he suggests, will continue to attract capital away from digital assets, particularly if Bitcoin fails to break through resistance levels after the Fed meeting.
With the Fed’s rate decision just days away, markets remain on edge. Bitcoin’s inability to reclaim its 2021 highs, coupled with Schiff’s prediction of Bitcoin topping out, has added to the uncertainty. Still, some analysts argue that digital assets could rebound faster than equities if economic conditions worsen.
“Crypto markets often bottom before traditional ones,” — Pillows added. “If Bitcoin is topping out now, it may also mean it finds a floor earlier than stocks when the economy slows.”
For now, however, Schiff’s cautionary stance is gaining attention. With gold and silver strengthening and Bitcoin struggling to overcome key technical barriers, the possibility of Bitcoin topping out before the Fed’s decision has become a focal point for investors navigating an increasingly complex economic landscape.
