Economist Schiff Accuses Trump of Manipulating BTC, ETH, ADA, XRP Prices, Claims Crypto Reserve is Inflationary

Peter Schiff, economist and crypto critic, demands an investigation into Trump’s crypto reserve, claiming that the announcement might amount to a pump and dump scheme.

Schiff initially supported a Bitcoin reserve if it excluded Ripple’s XRP, but he backpedaled on this comment and rejected the reserve treasury altogether. He now claims that Bitcoin supporters engaged in fraudulent behaviour by spreading false information about the currency online and benefiting from short-term market conditions.

Trump surprised everyone on Monday by announcing that a U.S. crypto reserve would include Bitcoin, Ethereum, XRP, Solana, and Cardano. As a result, Bitcoin and Ethereum jumped 10% in price, while XRP and Solana jumped around 20%.

Two posts were made on Trump’s Truth Social account. Schiff claims that these posts were responsible for the price jump in cryptocurrency, amounting to market manipulation. Schiff further states that the posts were carefully timed to benefit people who knew about the event in advance. The people he alludes to could be members of Trump’s family and politicians who are aware of the announcement, possibly buying cryptocurrencies like XRP in advance, only to sell them at a market high.

Schiff claims that he never supported a crypto reserve despite his earlier comments about Bitcoin and XRP. He accuses crypto supporters online of manipulating information to suit their own pump-and-dump schemes and laments that this kind of fraudulent behaviour is common with Bitcoin.

“But what’s the rationale for an XRP reserve”? Wrote Schiff. “Why the hell would we need that”?

The crypto press reported Schiff’s X posts as support for Bitcoin. Schiff became incensed at these reports because he believed his words were taken out of context.

Schiff reasoned, using his economic skills, that a crypto reserve would boost gold prices because, as funds are allocated to crypto, more productive industries will suffer, resulting in more inflation and finally boosting the gold price as investors rush to secure their wealth.

“If the U.S. government actually did buy crypto, it would be bullish for gold. By subsidizing the crypto industry, the government would divert scarce resources away from the productive sectors of the economy. That would result in larger trade and budget deficits and a lower dollar”.

In other words, a crypto reserve would slow economic growth and increase inflation. Investors would then buy more gold. This is not the first time an economist has concluded that Trump’s policies are inflationary. But would investors not buy more Bitcoin in the event of skyrocketing inflation? If that is the case then both gold and Bitcoin would benefit from a reserve. The crypto reserve, therefore, may benefit crypto afterall.