Economist Peter Schiff threw cold water on President Donald Trump's vision of making America the "world capital" of Bitcoin (BTC) on Wednesday, with a simple counterargument: China doesn't actually care about cryptocurrency.

Why China Isn't Playing Trump's Crypto Game

In a post on X, Schiff took direct aim at Trump's recurring claim that the U.S. must dominate cryptocurrency and blockchain technology to prevent China from pulling ahead in the global race.

"But Chinese leadership is too smart to care about Bitcoin," Schiff said. "While we're wasting capital and resources, they're building factories and buying gold."

China's Actual Crypto Policy: A Hard No

Trump claimed back in November that China was trying to get "big" into cryptocurrency, though no concrete evidence has emerged to support this.

The reality looks quite different. Beijing rolled out multiple restrictions between 2013 and 2021 that culminated in a complete ban on all cryptocurrency transactions and mining. China's central bank formally declared all digital-asset trading illegal in September 2021, and even providing crypto services to Chinese citizens from overseas is prohibited.

The central bank doubled down on enforcement in November, expressing particular concerns about dollar-pegged stablecoins.

Instead, China has focused its energy on developing its central bank digital currency, the Digital Yuan. And unlike the U.S., China hasn't announced anything resembling a Strategic Bitcoin Reserve.

Meanwhile, China has been aggressively accumulating gold reserves, with 14 consecutive months of purchases as of early January, according to Bloomberg.

Brutal Timing for Bitcoin

Schiff's comments land during a painful sell-off battering Bitcoin and the broader crypto market.

The leading cryptocurrency was trading just 1.8% above its previous bull-cycle peak of $69,700, having nearly wiped out all gains since Trump took office.

Price Action: At the time of writing, BTC was trading at $70,423.22, down 7.76% in the last 24 hours, according to market data.