It’s laudable the FT has found someone credible to speak against bitcoin (“Why bitcoin is worse than a Madoff-style Ponzi scheme”, FT Alphaville, FT.com December 22). The bitcoin hype is so strong it’s important to publish counter arguments. Unfortunately, the piece by Robert McCauley reads like the musings of a dinosaur examining a big flaming rock in the sky and wondering what it could be.
Firstly, bitcoin is a wholly new type of asset so analysing it as a security is useless. If you need to shoehorn it into any traditional category, you’d have a better time comparing it to a commodity, especially given that it responds to the macro climate in a similar way. Far from “pumping and dumping” (how can you “pump” an asset with a market cap the best part of $1tn?) most bitcoiners treat it as digital gold — a type of gold that can be sent anywhere in the world in an instant, weighs nothing and doesn’t need expensive storage.
While it could be treated as a Ponzi by some, the majority of bitcoiners do the opposite and Hodl (“hold on for dear life”) for five years or more, according to the “Hodl Wave” metric. These accounts may not need to sell to realise the value of their investment because they can borrow against their stack using any number of innovative, cheap loans that take digital assets as collateral, including self-paying loans. Google it.
Finally, no bitcoin “hit” piece would be complete without bringing up the environmental…
