 Bitcoin FUD: 6 common arguments from BTC skeptics during bull markets 
2025-01-02
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Since its inception, Bitcoin has faced relentless opposition fueled by fear, uncertainty and doubt, or FUD. Critics regularly denounce Bitcoin as volatile, unsustainable or a tool for crime. 
These narratives resurface with every Bitcoin (BTC) bull market, often deterring newcomers. Dan Held, a prominent Bitcoin advocate, said, “Naysayers try to cope with missing the boat by rationalizing why it will fail through ‘Fear, Uncertainty, and Doubt.’” But how much truth do these arguments hold?
Once dismissed as a niche project, Bitcoin is now embraced by financial institutions, investors and even politicians. Yet skepticism persists, with critics questioning its intrinsic value, energy consumption and societal utility.
Here are a few FUD narratives that pop up whenever Bitcoin is doing well. 
Bitcoin has no intrinsic value
Among Bitcoin’s most persistent critics are legendary investors Warren Buffett and the late Charlie Munger.
Buffett famously called Bitcoin “rat poison squared,” arguing that it lacks intrinsic value because it doesn’t generate earnings or dividends. Munger echoed these sentiments, describing Bitcoin as “disgusting” and its development “contrary to the interests of civilization.”
“I hate the Bitcoin success,” said Munger.
Bitcoin has been around since 2008, growing substantially in value into the highest-performing asset of the last decade.

Held counters this argument by saying that it does not make sense to criticize Bitcoin as having no intrinsic value “when their primary government currency has absolutely no intrinsic value.”
On Jan. 10, 2018, economists Aleksander Berentsen and Fabian Schär wrote in a Federal Reserve review article:
The study said, “The history of state monopoly currencies is a history of wild price swings and failures [...] this is why decentralized cryptocurrencies are a welcome addition to the existing currency system.”
The intrinsic value of a particular asset is abstract, as it depends on the people’s perception. Bitcoin’s scarcity, utility and technology underpin its value.
Bitcoin has a capped supply of 21 million coins, drawing comparisons to gold and earning it the nickname “digital gold.” Institutional interest, such as spot Bitcoin exchange-traded funds (ETFs), has solidified its position as a store of value, as it is scarce by design.
Bitcoin is just tulip mania 
Bitcoin’s rapid price growth has made many compare Bitcoin to financial bubbles like the dot-com crash or the Dutch tulip mania of the 17th century. 
Held disagrees, saying, “Bitcoin ain’t tulips. It provides the world with the best digital store of value ever created, allowing people to store value that is hard to seize and transmit to anyone else without permission.”
In 2017, JPMorgan CEO Jamie Dimon heavily criticized Bitcoin, calling it a “fraud.” In 2018, he said Bitcoin was “worse than tulip bulbs.” 
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He has since qualified his remarks and walked back some of his criticism. During a JPMorgan earnings call in 2021, Dimon remarked that “fads typically don’t last 12 years.”
In May 2024, reports emerged that JPMorgan had invested in Bitcoin through the spot Bitcoin ETFs, and the bank even created its own digital currency, JPM Coin. 
Since its creation, Bitcoin has experienced consistent upward trends marked by cyclical waves. Unlike infamous financial bubbles, it has not faced a catastrophic collapse that permanently devalued the asset.
Bitcoin is a tool for money laundering
Bitcoin is frequently attacked for its alleged role in illicit activities. United States Senator Elizabeth Warren has described Bitcoin as a mere “tool for money laundering” and called for stricter regulations to crack down on digital assets. 
However, Bitcoin’s blockchain is fully transparent, making illicit activity easier to trace than cash. 
Initially, criminals saw it as a great tool to hide their illegal activities, but they learned quickly that using transparent ledger technology may not help them. Bitcoin is pseudonymous. Accounts are anonymous, but if an account is linked to an identity, its history and financial movements will be exposed.
“The problem rests with government money, not Bitcoin or crypto which most operate on transparent ledgers that make it hard to obfuscate funds,” said Held.
That said, there are services that can obscure Bitcoin movements and abet illicit activity. Services like mixers and tumblers, which specialize in obscuring the flow of crypto funds, have seen a rise in money-laundering activities, according to blockchain data analysis firm Chainalysis.
Bitcoin is hungry for energy
Bitcoin’s network uses proof-of-work (PoW) as its consensus mechanism, where miners solve complex mathematical puzzles to validate transactions and secure the network in exchange for rewards.
Initially, anyone with a laptop could mine Bitcoin, but as competition increased, large-scale mining facilities were established, making Bitcoin mining an energy-intensive process.
The concerns are legitimate as, according to the University of Cambridge Electricity Consumption Index, Bitcoin’s energy usage is higher than Egypt’s annual energy consumption and is close to overtaking South Africa’s.
Held said that PoW is an efficient energy model. He criticized individuals for complaining about Bitcoin’s energy consumption without “comparing it to the energy consumption of gold mining, the financial system, government, courts, military, selfies, watching the Kardashians” or AI-generative models such as ChatGPT.
Bitcoin mining has been increasingly shifting toward using green energy in recent years. The dynamics of PoW push miners to search for the cheapest energy sources possible, and as Bitcoin mining is location-agnostic, miners can move globally. 
One of the most affordable energy sources is renewable energy, and Bitcoin miners have taken notice.
New research has shown that Bitcoin mining may potentially boost the transition to renewable energy. Researchers say monetizing the excess power collected by renewable energy could generate hundreds of millions of dollars in revenue, thanks to Bitcoin mining.
On May 12, 2021, Elon Musk directed Tesla to stop offering Bitcoin as a means of payment for its electric vehicles, as he was concerned about its environmental effects. On June 13, 2021, Musk said that Tesla would allow BTC transactions again once it was sure that at least 50% of the energy used by miners was clean and had a positive future trend.
According to blockchain data analyst Willy Woo and Bitcoin advocate and environmentalist Daniel Batten, Bitcoin’s usage of renewable energy is close to 57%; however, Musk hasn’t reacted to these new rates.
The lack of transparency in Bitcoin mining data remains an ongoing challenge. Batten argues that traditional media often publish misleading information about Bitcoin’s environmental impact, relying on poorly researched studies or “junk science.”
Batten observed a growing shift in media sentiment, with many news outlets adopting a more favorable or neutral stance toward Bitcoin mining as they conduct deeper investigations into the topic.
Q-day: Bitcoin is under a quantum threat
The internet relies on encryption protocols to protect data, with the US National Security Agency setting AES 256-bit encryption as the standard. Bitcoin uses this same encryption for its wallets, but many say that a future quantum computer could easily breach this encryption, compromising Bitcoin’s security.
With each quantum computing breakthrough, the crypto markets are flooded with FUD and claims that Bitcoin could become an easy target. 
On Dec. 10, 2024, Google unveiled its new quantum computing chip, Willow. It can supposedly solve computational problems in less than five minutes that traditional computing would take 10 septillon years.
Concerns over the “quantum threat” overlook a crucial point: A quantum computer capable of breaching Bitcoin’s security would likely target much larger honeypots, such as traditional banking systems, before Bitcoin.
Held claimed that Bitcoin is already ready for such an attack, and in the event of a real quantum threat, the Bitcoin protocol would simply need to be updated. 
The never-ending Tether story
Tether’s USDt (USDT), the largest stablecoin by market capitalization and a common trading pair to Bitcoin, is one of the most significant sources of Bitcoin-related FUD. Critics allege that Tether’s reserves lack transparency, fueling fears of a collapse.
The controversy began years ago when Tether was accused of issuing USDT without adequate backing, to manipulate Bitcoin prices during market rallies. The issue intensified in 2021 after the company revealed that only a portion of its reserves was held in cash, with the rest in commercial paper, secured loans and other assets.
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Despite Tether’s efforts to improve transparency, skeptics remain unconvinced. They argue that Tether’s dominance in crypto trading and the absence of a full third-party audit present systemic risks.
Justin Bons, founder of crypto fund CyberCapital, said that these concerns resonate with many crypto investors, and says a Tether collapse could be “one of the biggest existential threats to crypto as a whole.”
Held said the idea that a stablecoin that only represents 10% of Bitcoin’s market cap “could hurt Bitcoin by going bust is absurd.” Held said the genuine concern should be on Ethereum and its decentralized finance (DeFi) ecosystem. 
The collapse of USDt would be catastrophic, but Held said Bitcoin would ultimately survive, just as it has over the past 12 years through crises like the Mt. Gox hack, the Silk Road shutdown, the Chinese mining ban and the Bitcoin civil war with Bitcoin Cash. He argued that the real threat lies not in Tether’s potential fall but in the fear surrounding it.