Long-time Bitcoin [BTC] critic Peter Schiff is super-bearish on the asset and believes it will crash after the November midterm elections.
In an X post, Schiff warned that Bitcoin may not escape the rising inflation and bond yields that are dragging down broader U.S. stock markets.
With the Democrats about to take Congress and rising inflation and bond yields pricking asset bubbles, the price should be a lot lower by now. Sell your Bitcoin before the bottom drops out of the market and buy gold!
Bitcoin topped $87K in September. An attempt to break above the level in October failed. Much of the price action has reacted to macro events. In fact, on the 14th of October, it dropped and retested $80K after hotter CPI (inflation) data.
Overall, this brought the weekly losses to nearly 5%. So, the macro pressure cited by Schiff is a real bearish catalyst in the short term. But whether Bitcoin will drop below $80K and reverse its summer gains remains uncertain.
Will November midterms drag Bitcoin lower?
From a macro perspective, the odds of a 0.25% Fed interest rate hike surged to 27% from 22% after the hotter CPI data on Tuesday.
However, as of writing, the market consensus (72%) leaned towards a rate pause ahead of the Fed rate decision scheduled for the 28th of October.
On the rising bond yields, the expected U.S. Treasury intervention has been largely viewed as positive for Bitcoin and other scarce assets. In fact, this is what triggered the summer BTC breakout in the first place.
Simply put, inflation could be a short-term headwind. However, the rising bond yields may not be as negative as Schiff portrays it, especially if the summer debasement trade narrative repeats.
That said, Bitcoin has always rallied higher post-U.S. midterms. It’s highly likely that the Democrats will control Congress after the November midterms, as Schiff projects. For the House, Kalshi bettors are pricing a 90% win for Democrats and a 63% win in the Senate.
But the potential impact of anti-crypto Democratic control is mixed, at least in the short to medium term. Currently, regulators (CFTC, SEC) are driving crypto guidelines despite the CLARITY Act stalling.
And all Democrats can do is stall the rulemaking through congressional oversight, not stop it. In fact, Michael Saylor also viewed the current regulatory regime as bullish for BTC.
That said, Options traders appeared bullish and eyed $90K and $86K as end-year price targets for BTC. Overall, despite the macro uncertainty, some traders seemed hopeful of a recovery towards $90K.
Final Summary
- Schiff expects Bitcoin to crack below $80K amid macro uncertainty and regulatory headwinds if Democrats regain control of Congress.
- Some Options traders were betting on the contrary, with $90K as a price target for December.