Crypto Market Cap Falls Below $1 Trillion, but This Investing Legend Thinks It Can Fall Further

Peter Schiff has harsh predictions for Bitcoin and the economy as a whole.

After a tentative rally toward $25,000, Bitcoin's (BTC) price has plunged in recent days along with the rest of the crypto market. The total crypto market cap fell below $1 trillion over the weekend, according to CoinMarketCap. Having broken above the all-important psychological line in July, the crypto market is struggling to hold its recent gains.

Bitcoin is currently trading at just over $21,000 and one prominent trader says there's more pain in store for investors. Peter Schiff, the chief economist and lead strategist at Euro Pacific Capital, told his followers on Friday, "There's still time to sell." He added, "Better late than never!"

Peter Schiff remains bearish on Bitcoin

Schiff is known for his frequent crypto doom mongering on social media. The economist who's famous for predicting the 2008 stock market crash, tweeted a BTC price chart to show why he believes Bitcoin's price has further to fall. "The pattern remains very bearish," he said. "At a minimum support will be tested below $10K. Look out below!"

It's not only Bitcoin and crypto that have the well-known gold bug worried. Schiff thinks we're heading for a broader economic crisis. Indeed, he thinks the upcoming crash will be worse than the Great Recession of 2008. He argues that high inflation is here to stay, and that our economic woes have only just begun.

The outspoken economist told Kitco news that he didn't think Bitcoin could return to the highs we saw last year. "Personally I think Bitcoin topped out at $69,000," he said. "I don't think it's going to reach another high." Schiff said he thought Bitcoin could fall even further than $10,000, and stressed that much of the price increases in 2021 came from massive hype rather than actual value.

He described last year as a huge "pump and dump" for crypto and predicted that the market would plunge dramatically if and when BTC falls below $20,000 again. Schiff said buy-and-hold investors would ultimately lose out because they'd essentially go down with a sinking ship.

What it means for investors

It looks like crypto prices will continue to struggle in the short term. But what matters is your long-term view of Bitcoin and cryptocurrency. Peter Schiff has never been optimistic about crypto -- he believes it has no intrinsic value and has called Bitcoin a digital pyramid scheme. Bitcoin optimists disagree and argue that it could transform the way we manage money.

There are many experts out there with wildly differing predictions for Bitcoin. It could fall to $10,000 as Schiff predicts. It could eventually reach $1 million as Cathie Wood's Ark Invest suggests. And it could collapse completely. A lot depends on how the industry develops, what shape increased regulation takes, and whether adoption continues to move upwards.

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As an investor, you need to make your own decision about how you believe crypto could perform in the coming five, 10, or even 20 years. If you disagree with Schiff and think it has potential, you might invest a small proportion of your portfolio into crypto. However, even if you're optimistic, only invest money you can afford to lose. This is a relatively new and unregulated industry and there's a lot we don't know about how it will develop.

Moreover, it has never been more important to first cover your financial bases. The cost of living continues to increase, and we could be heading for even more economic difficulties. As such, prioritize building an emergency fund that covers three to six months' worth of living expenses over buying crypto. If you don't have emergency savings put aside to cushion you against potential job loss in a recession, now is not the time to buy risky assets.