BTC Is Real
5 min read
Last week, someone in my life asked me, in a cautious tone, if they could ask me a question about my new job. (I joined Decrypt on March 1 after spending a decade at legacy media outlets.) I had a feeling I knew what question was coming. The person’s question came out like this: “You didn’t take the job because you, like, believe in that stuff, right? Like, you see that it’s ridiculous and you don’t think it’s real, right?”
Well, BTC is certainly real. But I understood what the person meant: Am I a true believer, a crypto crazy? Do I think BTC is going to replace the US Dollar?
No. And I didn’t join a cryptocurrency news site in order to pump coins. (I own less than 1 BTC, which I bought back in 2014 as a reporting tool—I believe crypto journalists should own a little bit to play with because they need to test out the exchanges and products they write about.) But I do think any journalist who has covered crypto for a few years believes, at the very least, that the technology is interesting and potentially transformative. (I still remember the thrill of playing with the 21 BTC Computer, a handheld mini mining rig—really it was just a souped-up Raspberry Pi—from Balaji Srinivasan’s company 21, which he later rebranded Earn and sold to Coinbase. Crypto is cool, even for non-coders.)
I have heard the same person say to me, “When I hear the word crypto, my eyes glaze over.”And that’s perfectly fine. BTC skeptics still abound, and I completely understand their skepticism. BTC didn’t exist, and then it did, and 11 years isn’t so long in the big scheme of things. For a lot of people, it’s hard to see how something created out of thin air by a pseudonymous person in 2009, that you can’t physically touch, could be worth $60,000. (And who’s to say what the ‘right price’ is for BTC?)
Something has changed
But I do believe something has changed in the last few years, since the mania of late 2017: a larger number of people than ever before at least acknowledge that BTC is something that exists and will continue to exist. They may dismiss it as boring, or nerdy, or stupid, or avoid it as an investment, but it’s clear that BTC isn’t about to vanish or collapse tomorrow.
Sure, we all know the most famous negative sound bites. Nouriel Roubini has called BTC a fraud and a Ponzi scheme. JPMorgan CEO Jamie Dimon called BTC a “fraud worse than tulip bulbs.” Berkshire Hathaway CEO Warren Buffett said BTC investing is “not really investing,” and his respected longtime business partner Charlie Munger has called BTC “rat poison” and “turds.” Saudi Prince Al Waleed bin Talal called BTC “another Enron in the making.”
But those sound bites were almost all from a few years ago, mostly in 2017 amid the notorious ICO boom, when crypto startups made millions through “initial coin offerings” of tokens that, in most cases, served no purpose and had no product behind them. Apart from Roubini, none of those folks have repeated their sentiments at any time recently. Jamie Dimon has repeatedly walked back his comments, saying in 2018 he regretted calling BTC a fraud, and saying in 2020 that it’s “just not my cup of tea” and that “very smart people” are investing in it. His own bank just filed with the SEC to start offering a “cryptocurrency exposure basket” to clients. His rival bank, Goldman Sachs, is relaunching its BTC futures trading desk this month.
As for Prince Al Waleed’s comparison to Enron, billionaire investor and Dallas Mavericks owner Mark Cuban earlier this month, in an interview with Decrypt, said pretty much the opposite: He raved that if industries like healthcare and insurance start embracing blockchain record-keeping, “There’d be no Enrons. You wouldn’t have the level of fraud that you have now.”
Cuban isn’t the only celebrity businessperson who has suddenly gone gaga for crypto. Lindsay Lohan, Paris Hilton, and Ja Rule have minted NFTs, blockchain-based tokens that represent digital collectibles. Musicians including Kings of Leon, Grimes, Shawn Mendes, Aphex Twin, 3LAU, and Deadmau5 have all followed suit.
Perhaps that list makes crypto look more gimmicky than serious, but if you’d prefer serious Wall Street investors, take your pick of these hedge fund names: Bridgewater’s Ray Dalio; Paul Tudor Jones; Stan Druckenmiller; Bill Miller; and Cathie Wood of ARK Invest have all gone long on BTC in the past year. Or how about these publicly traded tech companies that have bought up BTC for their balance sheets: Square; Tesla; MicroStrategy; Meitu; and Aker ASA are all now holding.
The point is: It’s no longer so easy to say they’re all wrong, and dismiss BTC out of hand.
Sure, you hear some folks say that Elon Musk (Tesla), Jack Dorsey (Square), and Michael Saylor (MicroStrategy) were already crypto-inclined, and are hardly representative of the mindset of other CEOs. And some people still point to the dramatic 65% price crash of February 2018 as reasoning for why they expect the same to happen again. And indeed, another “crypto winter” is highly possible. But the next time that happens, having now seen what happened after the first big crash (the price eventually rebounded to its previous $20,000 high, then tripled), I bet more people will hold on, and not panic-sell.
It’s not going to zero. That’s long been another popular sound bite of BTC bears: that the world’s first and largest cryptocurrency could “crash to zero.” It has never gone back to zero since it started, and it’s extremely unlikely.
Certainly there are concerns about BTC’s energy usage that are fair to point out, though the ETH blockchain is attempting to move to a “proof of stake” model that should hypothetically do away with expensive mining rigs that suck up energy. And the potential price bubble in the NFT market, along with new concerns over ownership, threaten to detract from the promise of BTC. (Some are comparing the NFT explosion to the ICO boom.)
But BTC is likely to remain. A report from Deutsche Bank this week crowns BTC “too important to ignore.” I’d frame it differently: ignore it if you wish, but you should also ignore anyone still telling you that BTC is going to collapse.
This is Roberts on Crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt Executive Editor Jeff John Roberts. Sign up for the Decrypt email newsletter to receive it in your inbox in the future. And read last weekend’s column: BTC and Uncle Sam: It’s Complicated.
