What Bitcoin Bears Get Wrong

What Bitcoin Bears Get Wrong

By Benson Toti - min read

Bitcoin is having a resurgence, there’s no doubt about that. You can argue about how long this will go on for or whether there is fundamental value in the cryptocurrency, but it is back in the mainstream for now. What is interesting to watch is the “big personalities” who come out with uninformed attacks on the coin.

On such example is Kevin O’Leary, who consistently refers to it as garbage without understanding its fundamental worth. The Shark Tank investor believes it to be “a digital game” where winners are made not based on great investments, but learning how to play the volatility.

Not Aware of the Real Flaws in Bitcoin

What is funny to watch is how uninformed he is about the flaws of Bitcoin, and there are some very real ones. But when he states you can’t buy real estate with it (you can) and fails to see why many people would want a decentralized, permissionless currency, it is clear he has lost the thread. It also doesn’t help that he groups Bitcoin’s flaws with altcoins, showing how little he understands the space.

Besides the failure to see simple facts like that the yearly lows of Bitcoin have consistently gone up for years, O’Leary doesn’t seem to have realized that the people who will be helped the most by Bitcoin are not in his demographic. Bitcoin is the opposite of having a private banker and access to the global banking system. As a billionaire, he might not see the potential to serve all the unbanked in the world, as well as providing an alternative to holding cash in bank accounts that don’t even cover inflation.

Also, he has built his wealth by benefiting from the stability of major economies and working within the system. Compare this to the volatility in certain countries like Venezuela, and it is easy to see why Bitcoin would be a useful alternative for them.

Bitcoin’s price is currently in the upper $8000’s, which represents a 50% increase in just a few months. It is easy to see why people would critique this, but the actual debate over Bitcoin and it’s volatility during trading seems to ignore many of the reasons it is so powerful in the first place.

Yes, Bitcoin currently makes a poor medium of transfer, as the transaction fees and volatility would make buying a cup of coffee less than intelligent. But for purchasing real estate (especially globally) and storing large swaths of wealth, it is on its way to performing the same job gold does.

What These People Are Missing

There are very real critiques of Bitcoin, such as the prevalence of “whales” who can manipulate the market, scaling issues, and an inability for a large portion of the population to access it. But these are not usually the problems that “bears” are talking about. To them, investing in Bitcoin is pure foolishness because it is not currently better than the U.S. dollar in the way they measure a great currency.

However, from “the little guy’s” point of view, Bitcoin’s potential price appreciation provides an opportunity to both separate oneself from an economy that hasn’t helped them up till this point, as well as make high returns for making an early bet. This isn’t to say that you should put all your money in Bitcoin, but it is easy to understand the psychology of those who do.