Schiff Revives Bitcoin Backing Debate as Debt Surpasses $40 Trillion

Peter Schiff has revived the debate over what backs Bitcoin, contending that the power used by miners produces no lasting support for the cryptocurrency.

The gold advocate was responding to Bitcoin proponent Jeff Swanson, who had described the digital asset as money's future. Their discussion rekindled the longstanding cryptocurrency debate over the source of monetary value.

Schiff Dismisses Bitcoin Backing Argument

In his initial post, Swanson laid out three supporting arguments. The first was energy expenditure. Next came a predetermined issuance timetable and unprecedented computing power.

Schiff entirely rejected that line of reasoning. He stated that energy dissipates as soon as miners use it, leaving no residual support for the network. In his view, mining consumes value instead of preserving it.

Energy expenditures are not backing. The energy is gone, the money spent is gone, so there is none left to back Bitcoin.

— Peter Schiff (@PeterSchiff) September 5, 2026

Schiff, a longstanding gold proponent, has made this case for years. He contends that gold remains physically present after extraction, whereas electricity disappears once used.

The current environment supports his position. Over the past several months, the hash rate has declined as mining operators shifted electricity to AI applications, and numerous miners exited the network during this period.

However, Schiff did not address the fixed supply cap. This means the argument for Bitcoin being backed now relies on its hardest numerical constraint rather than on energy consumption.

$39 Trillion Debt Figure That Has Already Been Surpassed

Swanson estimated U.S. government debt at $39 trillion. But Treasury records tell a different story. The total public debt outstanding surpassed $40 trillion on August 18 and stood at $40.10 trillion as of September 3, based on the department's daily statements.

This discrepancy is significant because the debt comparison underpins the remainder of Swanson's argument. The $40 trillion threshold was crossed in August, and government borrowing has shown no signs of deceleration since then.

Additionally, Swanson linked his argument to trust in the entity that issues the U.S. dollar. Schiff overlooked that aspect entirely, focusing solely on the energy claim.

In the market, price developments provided little reassurance for either party. On Sunday, Bitcoin (BTC) was trading at approximately $79,600, representing a decline of about 1.5% over the preceding 24 hours.

Schiff has shown some flexibility in the past. Last month, he acknowledged that he had missed out on Bitcoin's price increases, though he maintained that long-term holders had performed less well than they assert.

Neither party yielded any ground in this exchange. Yet the issue of what backs Bitcoin resurfaces each time a new debt milestone is reached.