bullionbullscanada.com / by Jeff Nielson / 26 July 2016
As noted in Part I, the motivation for writing this article is what appears on its surface to be a large contradiction: Peter Schiff, until recently one of BitGold’s most strident critics, is now BitGold’s newest business partner. The justification for writing this (two-part) article is that it was not possible to fully encapsulate the entire contradiction in a single installment.
Schiff’s more recent attacks on BitGold began (back in March) with the assertion that he was “warning potential gold-buyers about another gold ripoff.” While rhetoric such as that can be attributed as simply the crass intent to bash a competitor of his own business, it is far less easy to write-off Schiff’s more specific criticisms in that manner.
Schiff claimed that the vast majority of BitGold’s current customer base is composed of tiny accounts, lured to BitGold by its promotional offer of “free gold” for new accounts. He asserted that because of the cost of such marketing and all of the advertising spent in pursuit of these accounts, BitGold’s business model is presently unsustainable. This appears to be correct.
Schiff claimed that he, himself, was not interested in having lots of customers with tiny accounts, because these are “money-losing accounts.” From a purely administrative standpoint, this also appears to be correct.
Schiff claimed that BitGold’s management did not “have any idea of the size of the bite that they are going to try to chew” to maintain all of these money-losing accounts. This remains to be seen. However, the veracity of this particular assertion is tied into another of Schiff’s volleys.
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