Longtime crypto critic Peter Schiff argues that Bitcoin's recent surge above $80,000 is irrational because the Securities and Exchange Commission's approval of tokenized stocks creates direct competition for the digital asset. Schiff contends that the regulatory move weakens Bitcoin's case as a store of value by offering investors a new asset class that combines blockchain infrastructure with traditional equity rights.
Bitcoin jumped more than 5% on Friday, reaching approximately $80,587, after the SEC opened a regulatory pathway for tokenized US equities. The cryptocurrency continued to rise on Saturday, trading around $81,290, which represented a 1.6% increase over the preceding 24 hours. Schiff dismissed this market reaction, stating that the rally "makes no sense" because the announcement is bearish for Bitcoin.
The SEC granted qualifying platforms a five-year conditional innovation exemption, allowing them to trade tokenized versions of US-listed stocks using blockchain-based infrastructure. Under this framework, issuers of National Market System stocks must receive advance notice and may object to the tokenization of their shares. Investors in these tokenized products must retain standard shareholder rights, including dividends and voting power. The rule specifically excludes synthetic products that merely track a stock's price without providing ownership interests.
Schiff's argument rests on the economic differences between Bitcoin and tokenized equities. While Bitcoin offers scarcity through a fixed maximum supply of 21 million coins, it does not provide a claim on corporate earnings or cash flows. In contrast, tokenized stocks offer economic ownership of an underlying business. Schiff argues that tokens representing profitable, dividend-paying companies serve as a more reliable store of value than Bitcoin and will absorb liquidity that might otherwise enter the cryptocurrency market.
The tokenized stock market remains significantly smaller than traditional equities. According to Reuters Breakingviews, tokenized stocks are currently valued at about $3 billion, with monthly trading volume below $30 billion. Despite these modest figures, Schiff believes the expansion of tokenized assets introduces a direct competitor for capital seeking digitally native investments.
Bitcoin supporters maintain that the asset is fundamentally different from equities. Its value proposition relies on decentralization, scarcity, and independence from company performance, whereas tokenized stocks remain subject to issuer, market, and regulatory risks. The debate highlights a split in interpretation regarding the SEC's decision. Some analysts view the approval as validation for blockchain infrastructure in mainstream finance rather than a threat to Bitcoin. This perspective aligns with other recent market movements, including roughly $160 million in Bitcoin ETF inflows on Thursday following two days of outflows.
The digital asset gained ground despite earlier obstacles this week, such as the Senate blocking progress on the CLARITY Act and the Federal Reserve implementing its first interest rate increase in three years. For Schiff, however, the core issue is whether investors will treat tokenized stocks as an alternative to Bitcoin or simply as another asset class moving onto shared blockchain infrastructure.