Bitcoin was launched in 2009. It’s now 2021, and while mainstream media loves to ask the question, “Is Bitcoin dead?”, it’s quite painfully obvious that no, bitcoin is not dead.
In fact, Bitcoin is not just surviving, it’s thriving. But being wrong once doesn’t won’t stop them from being wrong again, and year after year, we see headlines declaring bitcoin’s death, and it’s even deader this time than last.
The time for declaring bitcoin as dead is over. Now it’s time to see how bitcoin fits into our world. Bitcoin is here, it works, and it’s going to continue to be here in the future. Of course, that won’t stop the haters from trying to be contrarian and continue to declare bitcoin dead. My advice is to just look at the facts, make up your own opinion, and buy bitcoin when you figure out that it’s the best money you can own.
Every day that goes by and Bitcoin hasn’t collapsed due to legal or technical problems, that brings new information to the market. It increases the chance of Bitcoin’s eventual success and justifies a higher price.Hal Finney
6 Types of People Saying Bitcoin Is Dead
1. Economists: Bitcoin Is Dead!
Economists have been predicting bitcoin’s demise since 2011. Economists are smart and qualified, so if they say it can’t work, then it shouldn’t work – right?! Lucky for us, honey badger don’t care, and bitcoin keeps on living despite years of ominous predictions that it was a bubble. Well, the bubble can only pop so many times before you need to start to rethink your original perceptions. Or so you would think.
Despite this, famous economists such as Steve Hanke have continued to opine on bitcoin’s price and other metrics. Here’s @steve_hanke complaining that crypto markets have a combined market cap of 3 trillion and making a prediction that everything will end in tears.
Unfortunately, Hanke spent his credibility when commenting on bitcoin when he failed multiple times in previous years to predict “final crash”. Sure, bitcoin’s price will crash, then recover, then crash again. Some volatility is bound to happen while a new global monetary system finding its footing. However, when he said in 2015, during the depths of a multi-year bear market that bitcoin was “past its prime”, he was dead wrong. The truth is, it was a great time to buy.
Similarly, New York Times columnist and Nobel prize laureate Paul Krugman took the time to predict bitcoin’s death during the 2017 bull market, and tap dance on bitcoin’s grave during the subsequent downturn.
Let’s not forget that Krugman called bitcoin “evil” in 2011. That’s pretty extreme. Bitcoin is a neutral technology. It’s a communication protocol like the internet. Would you call the internet “evil”? That doesn’t really seem like an objective analysis of the pros and cons of having a global monetary system that uses cryptography and code to separate money and state.
Based on this track record, I’d say it’s solid advice to not follow investment advice from accredited economists.
2. Politicians: Bitcoin Is Dead (or should be)!
Naturally, some politicians hate bitcoin and are just foaming at the mouth waiting for bitcoin to die. Bitcoin is an easy target for them since they can point to all types of bad things bitcoin facilitates like terrorism, climate change, child trafficking, and white supremacy. There’s always something to grab from the box of bitcoin FUD.
What they fail to mention, of course, is outside of the small amount of criminal activity that happens on the bitcoin network, the vast majority of criminals have historically used, and still use, the US dollar.
With some politicians, like Brad Sherman, it’s easy to speculate on why they would take such an adversarial stance to a tool for freedom like bitcoin. Their funding comes from big banks and other companies that profit from the current state of the financial system.
With other politicians, it seems their opposition to bitcoin stems from pure ignorance, such as Elizabeth Warren, who claims that a financial system puts everyday people’s money into the hands of “shadowy super coders”. She also thinks that we should kill bitcoin because uses too much energy.
The good news is that we may see a reversal of this trend. In recent years, some politicians have started coming out as very pro-bitcoin and are getting lots of media attention for it.
This includes the mayor of Miami, New York, and Jackson, Tennessee, as well and the governor of Texas, and a senator from Wyoming. We now have several presidential pro-bitcoin presidential candidates as well.
Outside of the US, the president of El Salvador is decidedly pro-bitcoin, and a number of South American countries have also signaled intent to make their regions pro-bitcoin.
3. Venture Capitalists: Bitcoin Is Dead!
Technologists and Silicone Valley insiders hate bitcoin. Many popular VCs and successful capital allocators in the technology space consistently make anti-bitcoin predictions. Some simply say that bitcoin will fail. Others say that new technology will outcompete bitcoin, with the most famous comparison being that Facebook crushed Myspace back in the day.
Of course, the wealthy tech elite are consistently wrong in their predictions.
Jason Calacanis predicted that bitcoin would go to zero at the bottom of the 2018 bear market, but somehow we’re sitting above
$60,000 in November 2021 $30,000 in June 2023.
While we sit hovering around all-time highs, with Taproot locked in, and more enthusiasm for bitcoin than ever before, Calacanis is still predicting that another “project” is going to come out of nowhere and surpass bitcoin to become the most popular and trusted digital store of value and medium of exchange.
Seems unlikely to me, but what do I know? I’m just a poor pleb compared to this big-brain angel investor.
If Bitcoin Was Going To Win, I Would Have Seen It Coming!
Personally, I think it’s a power move. They do this as a means to be both contrarian and right. They made their money by making a “great bet” on an early stage company, and their brand is often that they know things that other people don’t. They can pick a Twitter or and Uber out of a crowd of thousands, because they have the skills to do so. Bitcoin is too obvious of an answer, so they bet against it.
They are likely making the logical error in thinking, “If bitcoin was going to succeed, I would have known it already!”
Of course, bitcoin is not a technology company, so it works differently. Bitcoin has already “won” against all other cryptocurrencies, so betting against bitcoin is the wrong move.
4. Traders: Bitcoin Is Dead!
Speaking of betting against bitcoin, a number of high profile traders have publicly bet against bitcoin and lost. The most recent one to do so was Michael Burry, the subject of the movie The Big Short. He’s the guy who famously predicted the 2008 subprime mortgage crisis and the complete meltdown of American financial institutions.
He seems like a guy who can call a bubble before it happens, right? We should listen to his analysis, right?
In June 2021, Burry posted a sassy tweet about Bitcoin forming a “head and shoulders” pattern, which is typically a bearish sign, signaling an imminent drop in price. Just a few weeks later, bitcoin not only failed to drop in price, but retraced almost completely to previous highs. A month or two after that, we hit a new all-time high.
In this case, Burry was not actually short bitcoin so he didn’t lose any money as the price blew past its previous ATH. Also, several months later, bitcoin did crash 75%, so I’m not sure if this pattern he drew out actually came true within his predicted time frame, or it was just a coincidence.
Jordan Belfort, the famous Wolf of Wallstreet, has ping-ponged between stances, sometimes claiming that bitcoin’s price is based on the greater fool’s theory and will go to zero. Bitcoin investors are brainwashed! At other times, he’s made future price predictions as high as $100,000, and still other times promoting Tether fud.
His mental framework is, “I was a scammer, so I know scammers”. To a hammer, everything looks like a nail, and he may see some red flags in the broader cryptocurrency market and is applying that logic to bitcoin as well. Honestly, I’d actually agree with him that most cryptocurrencies are scams, and ALL are going to zero. What’s clear to me is that he doesn’t understand that Bitcoin is different.
That’s why the saying goes, everyone gets bitcoin at the price they deserve. You have to put in the hours to understand what bitcoin is, because a cursory Google search and some pop-culture, MSM articles are not going to do it justice.
Why do traders say bitcoin is dead? Fame. Everyone wants to call the top and get the recognition. Both Burry and Belfort got movies made about them, so imagine how much attention you’d get by being the guy who called the bitcoin top from early on. Bitcoin isn’t a stock though, and it doesn’t behave like a stock. Bitcoin trades 24/7/365 in all jurisdictions, with no regulations. Bitcoin plays by its own rules, so the standard trader playbook doesn’t work here.
5. Investors: Bitcoin Is Dead!
Investors wish bitcoin was dead, and can’t stop calling for its demise. “The scam” can only go on for so long, right? What they’ve failed to do however, is realize that when reality turns out to be different than they predicted, they need to update their mental models. Famous investors like Charlie Munger & Warren Buffet hate bitcoin, though it’s hard to understand why.
My best guess is that they simply haven’t done the homework and are used to seeing the world a certain way. They have a lot of their plate, so when someone asks them about bitcoin, they are just giving their initial impression. Many of us were wrong about bitcoin the first time we heard about it, right?
Or perhaps they are just used to being right all the time, so when bitcoin doesn’t actually die as they predict, they double down with more colorful language. Bitcoin legitimately drives some investors mad. Munger and Buffet have called bitcoin rat poison. Nassim Nicholas Taleb has called bitcoin an idiot detector. Mark Cuban has said bitcoin is a bubble and he’d rather own bananas than bitcoin.
Bitcoin Isn’t A Company, It’s A Technology
Big investors hate bitcoin because they don’t understand it.
It’s not a company, so it doesn’t have cash flow. There is no CEO. There are no quarterly earnings reports. Ratings agencies don’t apply here. Bitcoin is a new technology. Bitcoin is a new money. Bitcoin is a new idea. What can you say to these guys other than NGMI.
So when you look at bitcoin through the lens of “how can I find a proper valuation for this company”, your formula spits out a big fat zero. Bitcoin is not a company, so you need to adjust your mental model.
Of course, then big investors get a big head about it, and if they can’t figure it out, then it must be worth nothing. Right?
6. Bitcoiners: Bitcoin Is Dead!
Surprisingly, there have also been many high profile bitcoiners, who, throughout the years, have declared that bitcoin is dead. Two of the most famous happened during the 2017 blocksize war, where opposing factions debated how to properly scale bitcoin in preparation for global adoption. The “small blockers” won, inciting some of the big blockers to either rage quit, or move on to develop their own version of bitcoin.
For example, Mike Hearn, a long-time bitcoin developer declared bitcoin was dead because the 1 megabyte blocks were full, creating slow transaction confirmation times and high fees. 3 years later, blocks are empty and I can get a 2 sat/vbyte transaction through any day, any time of the week.
Again, because of block size, Roger Ver, previously known as Bitcoin Jesus because of his nonstop, enthusiastic Bitcoin evangelism, moved on to promote Bitcoin Cash, with larger blocks. This move stemmed from his misinterpretation of the word “cash” to mean “pocket change”, and not “bearer instrument“. His famous argument was that you can’t buy coffee with bitcoin because fees were too high.
Meanwhile the original bitcoin (BTC), has been successfully scaling with cheap and fast lightning payments. Yes, you can pay for coffee with bitcoin on lightning!
Another common narrative is that you can’t innovate on bitcoin, namely that bitcoin doesn’t have smart contracts like some of the more popular cryptocurrencies out there right now. Well, Taproot just activated a few days ago (Nov 2021), enabling smart contracts. It’s still very early days, but that’s how bitcoin rolls – slow, steady, cautious, and deliberate execution. Bitcoin development isn’t dead. It’s just done right.
Bitcoin Isn’t Dead, But Could It Die?
I think the time for predicting bitcoin’s death is over. Tim Apple recently commented that he thinks that bitcoin has a reasonable place in a diversified portfolio of assets. You can even own bitcoin as part of your retirement 401k or IRA. It’s highly unlikely at this point that bitcoin is going to zero. Still, it’s important to think adversarially and be aware of all possibilities.
Here are some scenarios where I think bitcoin could die.
Global Coordination of Top Nations For Blanket Ban
It’s well known that if one nation bans bitcoin, it’s ineffective. We saw this play out in Nigeria and India when they tried to ban bitcoin. Not only did bitcoin transactions continue as normal outside these individual countries, but internal bitcoin usage spiked. Eventually, they reversed the bans. Earlier this year China banned bitcoin mining and all the miners just moved to North America. The bitcoin network is very antifragile. For each ineffective strike against it, bitcoin becomes more robust.
However, I think it’s possible that there could be some kind of global coordination of top nation states to ban some aspects of bitcoin usage or bitcoin mining that could cripple the network for everyday users. I can imagine a near future where there’s some kind of anti-bitcoin global summit of G20 nations who decide Bitcoin “is a threat to democracy” or the “main cause of climate change” and we need to Build Back Better Without Bitcoin.
Something like that is not outside the realm of possibility. It doesn’t matter whether it’s logical or good. Our global leadership has shown that they won’t let logic stand in their way of getting done what they think needs to be done.
Reason why it won’t happen: Although they have tried to plan things on a global scale, so far they have not been able to effectively execute their plans, and there has been pushback along the way. Just look at the COP26 mess where hundreds of politicians flew private jets into Scotland to discuss how to reduce carbon emissions around the world.
Bitcoiners are technically savvy and extremely motivated as well, so don’t think they wouldn’t go down without a fight!
Bitcoin cannot die because it will never die in all places all at once.Dan Tapiero
Fatigue & Disillusionment
Generally speaking, over the past decade the community has grown in all aspects. There are more users, more developers, more companies, more events, more educational resources, and more bitcoiners.
The first Bitcoin conference ever had about 75 attendees. The Bitcoin 2021 conference was 12,000 people. Bitcoin 2022 has a capacity of over 35,000.
More people means more enthusiasm, more support, more building, more ideas, and more money. What happens if we don’t hit the tipping point of mass adoption and things become stagnant? What if we hit a scaling issue that takes too long to solve and people move onto the next hot thing like NFTs? Not every person who owns bitcoin is a “bitcoiner”. Many people own bitcoin as an investment and they’re ready to ditch it as soon as it stops performing.
It’s possible, that at some point in the future bitcoin just stops growing and becomes less fun. It’s just money after all. At that point, bitcoin wouldn’t be dead per se, but it may not achieve the global adoption bitcoiners hope for.
Reason why it won’t happen: Bitcoiners are a group of incredibly passionate, hard working people, who care about what bitcoin stands for regardless of the price. Bitcoin selects for independent-minded people who are willing to work to create a future they want to live in. Even if the periphery waxes and wanes with enthusiasm for bitcoin, the core bitcoiners will see this thing to the end and change the world. They are the remnant.
It’s possible that some kind of zero-day bug is still lurking in bitcoin’s software somewhere, and it’s just waiting to be found by a malicious hacker in the future. It would not be possible to permanently disable the bitcoin network, but it could happen the hacker does something that would make people stop believing that bitcoin is a secure store of value.
Reason why it won’t happen: I used to think this was more of a possibility than I do now. After listening to quite a few podcasts with early bitcoiners and learning how much code has been fixed over the years, I think that if we ran into some kind of catastrophic issue, everyone would pull together and things would get fixed. We may lose a few people along the way, but the bitcoin network and narrative would remain intact.
Systems run into issues, and people complain, but then we move on. Of course, the price would probably take a hit for some period of time, but I think there are too many people, companies, and capital tied up in the bitcoin network to just pack things up and go home.
Bitcoin isn’t dead. Despite predictions and attacks over the past decade, the network is thriving. What does that mean though? It means bitcoin is Lindy.
The longer bitcoin sticks around, the longer it will be around. Every day bitcoin doesn’t die, it gets one step closer to global adoption.