Peter Schiff Warns Bitcoin Rally Could End Before Fed Rate Cut

Peter Schiff warns Bitcoin may peak before the Fed’s rate cut, highlighting its struggles while gold and silver show strength.

Peter Schiff, a prominent Bitcoin critic, has raised concerns that Bitcoin’s rally may be nearing its end ahead of the Federal Reserve’s anticipated rate cut. The Federal Open Market Committee (FOMC) is expected to meet on September 17 to discuss economic conditions.

Schiff’s warning comes as Bitcoin experiences selling pressure, despite a 4% weekly gain. His comments highlight the growing uncertainty in the broader cryptocurrency market.

Bitcoin Faces Resistance Ahead of Fed Decision

Bitcoin’s price is struggling to surpass the $116,000 level, facing strong resistance despite an overall positive sentiment in the market. This resistance comes as the Federal Reserve approaches its anticipated rate cut decision. 

Schiff pointed out that Bitcoin has not been able to take advantage of the optimism seen in traditional safe-haven assets like gold and silver. He also noted that Bitcoin remains 15% below its 2021 peak when priced in gold, signaling potential weakness.

According to Schiff, while gold and silver are showing strength in the current economic climate, BTC is struggling to maintain momentum.

This contrast between traditional assets and Bitcoin’s performance has raised concerns about its ability to maintain growth in the near term. Schiff emphasized that Bitcoin’s failure to break past previous highs could be a sign that the rally is nearing its end.

Fed Rate Cuts and Their Effect on Risk Assets

The upcoming Fed rate cut could have broader implications for risk assets, including Bitcoin. Economic analysts, including Ted Pillows, explained that U.S. interest rate cuts often signal underlying economic challenges. 

Historically, this has led to negative performance in U.S. stock markets in the months following a rate reduction. Risk assets tend to react more sensitively to changes in the economic landscape, especially when rate cuts are seen as a response to economic instability.

Pillows also noted that while traditional risk assets may struggle, digital assets, like BTC, may respond differently.

He observed that cryptocurrencies often reach a bottom before U.S. equities. However, Bitcoin has shown weaker performance compared to altcoins, which have gained momentum recently.

Bitcoin’s Struggles Compared to Traditional Assets

Schiff pointed out that Bitcoin’s performance is now under scrutiny, especially as other markets, like equities, have reached new highs.

Meanwhile, BTC has faced selling pressure and has struggled to break through its all-time highs. He argued that the digital asset’s inability to capitalize on the optimism from the Fed rate cut signals growing risks in the crypto market.

Despite Bitcoin’s challenges, traditional assets like gold and silver continue to shine, with investors flocking to safer options amid rising economic uncertainty.

Schiff reiterated that Bitcoin’s price action could signal a topping out before the expected Fed rate cut, a sentiment shared by many market observers. This caution comes as Bitcoin continues to face resistance in breaking new price barriers.