24 Reasons Why I Don't Believe in Bitcoin & Crypto
Although I’ve made numerous successful bullish calls on Bitcoin over the years, there are many glaring reasons why I never became a true believer in it.
Since Donald Trump’s decisive election victory last month, Bitcoin, Ethereum, Dogecoin, XRP, and a host of quirky altcoins are surging once again, evoking memories of the 2021 crypto mania. At this pace, even NFTs might stage a comeback—and honestly, I wouldn’t be surprised if they did! Over the years, I’ve made a number of successful bullish calls on Bitcoin, including in early-2016, 2019, 2020 before the 7x bull run, and the more recent breakout in October. Yet, despite these successes, I’ve never become a true believer in Bitcoin or cryptocurrencies. While the crypto community often dismisses, ridicules, gaslights, and shouts down anyone who dares to question their beloved investments, I’ve compiled a list of twenty-four valid and compelling reasons why I never fully embraced Bitcoin or the broader crypto arena.
The potential number of cryptocurrencies is unlimited.
The Bitcoin community often touts the hard cap of 21 million bitcoins as evidence of its status as the hardest currency and a form of "sound money," ideal for safeguarding against the debasement of fiat currencies. However, they overlook a glaring truth: Bitcoin's so-called scarcity is an illusion. An unlimited number of other cryptocurrencies can, have, and will continue to emerge, diluting attention and capital while undermining demand for Bitcoin. In 2013, there were only seven cryptocurrencies; today, that number has skyrocketed to 15,807—an astonishing increase of 225,714%!
With virtually no barriers to entry, nearly anyone can create a cryptocurrency—case in point, the 13-year-old who recently launched a coin, pumped and dumped it during a live stream, and walked away with $30,000. This brings to mind a saying from the commodities world: “The only cure for high prices is high prices.” In other words, sufficiently high prices for a commodity—or in this case, cryptocurrencies—inevitably lead to an influx of new supply, ultimately driving prices lower. By contrast, gold and silver are genuinely scarce; their supply is limited by the number of atoms in existence, as alchemists learned the hard way when they failed to create more. Moreover, no new precious metals are being invented or discovered.
Bitcoin enthusiasts often insist, "Bitcoin isn't crypto," but this argument is just a convenient cop-out. History demonstrates that excitement around Bitcoin inevitably sparks broader enthusiasm for the entire cryptocurrency ecosystem—and that's precisely what we've seen in recent weeks. While Bitcoin may have been the first cryptocurrency, the crypto space has since fractured into countless tribes and factions, each rallying behind their chosen coin, whether it's Ether, XRP, Dogecoin, Solana, or another contender. It's hard to argue that this fragmentation doesn't siphon attention and demand away from the original cryptocurrency, Bitcoin.
The claim that other cryptocurrencies don’t threaten or dilute demand for Bitcoin is simply incorrect. To put this into perspective, the total market capitalization of all cryptocurrencies, including Bitcoin, is currently $3.84 trillion. Bitcoin accounts for $2.07 trillion of that, representing 53.94%. Meanwhile, the combined market capitalization of other cryptocurrencies stands at $1.77 trillion, or 46.33%.
Using some quick back-of-the-envelope math, if Bitcoin were the only cryptocurrency and captured the entire $3.84 trillion market cap, its price would be approximately $194,272—significantly higher than its current price of $104,736. This clearly illustrates how the existence of other cryptocurrencies dilutes demand for Bitcoin.
The Bitcoin market cap dominance chart below highlights how Bitcoin’s market share has declined over time with the introduction of new competing cryptocurrencies, especially during major crypto booms like those in 2017 and 2021. Given this trend, it’s highly likely that the current Trump-era crypto boom will follow a similar pattern.
The risk of Bitcoin and other cryptocurrencies being rendered obsolete by more advanced and modern cryptocurrencies.
Bitcoin, launched in 2009, holds the first-mover advantage as the original cryptocurrency. However, since then, countless other cryptocurrencies have emerged, with many of their proponents essentially labeling Bitcoin as Crypto 1.0 and positioning their preferred coins as Crypto 2.0, 3.0, and beyond. For example, Bitcoin’s transaction speed is far slower than Ethereum’s (up to 10 minutes compared to under a minute), and its electricity consumption is vastly higher (703.25 kilowatt-hours per transaction versus just 0.0008 to 0.0147 kilowatt-hours for Ethereum). Additionally, both Bitcoin and Ethereum have significantly higher transaction costs compared to alternatives like Litecoin, Bitcoin Cash, XRP, and Dogecoin.
What if Bitcoin is the MySpace or BlackBerry of crypto, while XRP, Ethereum, or another cryptocurrency becomes the Facebook or iPhone of the industry? This possibility, often referred to as “the flippening,” raises a critical challenge: betting on which technology will prevail. For the average investor—especially one without a computer science and finance background—this is little more than a gamble with no clear edge. If you invest heavily in Bitcoin and it ends up following the path of BlackBerry, you would lose practically all of your investment—an outcome that won’t happen with gold and silver.
(As I was writing this report, Google unveiled a groundbreaking quantum computing chip capable of solving a problem in just five minutes that would take the world’s fastest supercomputers an astonishing ten septillion years—equivalent to 10,000,000,000,000,000,000,000,000 years. While this particular chip may not immediately threaten the security of Bitcoin or other cryptocurrencies, the potential risks posed by quantum computing in 5, 10, 15, or 20 years are very real. This is an important consideration for anyone investing in crypto with a long-term perspective.)
Bitcoin is notoriously energy-intensive and inefficient.
As I mentioned earlier, Bitcoin is a massive electricity hog, both in absolute terms and compared to other cryptocurrencies and payment methods. This inefficiency arises from Bitcoin’s proof-of-work (PoW) mechanism, also known as mining, which requires solving complex encryption puzzles to process transactions. Due to the computational intensity of these PoW operations, Bitcoin now consumes an estimated 175.71 terawatt-hours (TWh) annually—a staggering increase from just 9.59 TWh per year in 2017.
To put this into perspective, Bitcoin's energy consumption exceeds that of many entire countries including Poland, Egypt, and Malaysia. And this doesn’t even account for the thousands of other cryptocurrencies, all contributing to the cumulative energy demand. One Bitcoin transaction alone uses as much electricity as nearly 500,000 VISA transactions and consumes as much water as a backyard swimming pool.
While I’m not a bleeding heart environmentalist, it’s difficult to justify such an extravagant use of increasingly scarce fossil fuel energy, especially when no truly viable alternatives are on the horizon. This unsustainable energy consumption raises serious concerns about Bitcoin’s long-term viability and dampens my optimism for the future of cryptocurrencies as a whole.
Bitcoin might be in a massive bubble, artificially inflated by Tether.
Although this point is somewhat technical, many critics, including voices within the crypto community, have raised concerns that Bitcoin's meteoric rise may actually be a massive bubble, artificially inflated by the cryptocurrency Tether through its USDT stablecoin. A significant portion of Bitcoin trading is conducted using Tether rather than fiat currencies like dollars or euros. The concern lies in the claim that much of this Bitcoin buying is facilitated by USDT tokens created out of thin air, allegedly without full backing by actual reserves.
This scenario resembles a Ponzi scheme, as it relies on a continuous influx of new "capital" to sustain the system. When the flow of new funds dries up, such schemes tend to unravel spectacularly, leading to sharp asset price collapses. While the specifics of this issue are highly technical and difficult to independently verify, it raises a red flag. For me, this lingering question casts doubt over Bitcoin's ascent and makes it harder to place complete trust in its sustainability.
Its real-world usage remains minimal, primarily limited to speculation.
When the original Bitcoin white paper, "Bitcoin: A Peer-to-Peer Electronic Cash System," was published on October 31, 2008, it explicitly outlined the goal of creating a peer-to-peer system for electronic transactions that eliminated the need for a trusted third-party intermediary. Notably, the paper made no mention of Bitcoin being intended as a store of value or a speculative investment vehicle.
As awareness of Bitcoin grew, curiosity about the cryptocurrency increased, and it soon found use in Silk Road and other illicit transactions. This drove its price up rapidly—from $0 at its launch in 2009 to $0.30 by the end of 2010 and an impressive $29.60 by June 8, 2011—and the rest is history. As its price skyrocketed in percentage terms, even if not in absolute dollar amounts, speculators quickly realized the immense profit potential for those fortunate enough to capitalize on the wild surges of this highly volatile, fledgling asset.
Fast forward 16 years, and Bitcoin, along with its 15,000+ crypto competitors, remains largely absent from everyday real-world transactions. This is plainly evident: cryptocurrencies are not being used to buy groceries, pay rent, cover mortgages, settle utility bills, pay college tuition, cover car insurance or phone bills, pay employees, dine out, or pay taxes. For most normal, everyday people, crypto has yet to become a practical tool for daily financial needs.
The primary reason is that existing conventional payment systems, while not without flaws, are familiar, user-friendly, and sufficient to meet the needs of most people. Moreover, Bitcoin and other cryptocurrencies are extremely volatile (a topic I’ll delve into shortly), introducing a level of risk and uncertainty absent in traditional payment methods. This volatility makes cryptocurrencies less reliable and, in many ways, a downgrade in terms of practicality. In many regards, cryptocurrencies are a solution in search of a problem.
For years, Bitcoin and cryptocurrency advocates have argued that crypto adoption for practical, day-to-day use is still in its infancy and well on its way to going mainstream. Yet, nearly two decades later, the needle has barely moved. A common proxy for crypto adoption is the number of active addresses for a given cryptocurrency. While this metric does show growth, the reality is that most of this "adoption" is driven by speculation and investment rather than real-world payments or transactions.
As the graph below illustrates, the number of active Bitcoin and Ethereum addresses tends to spike during major speculative episodes, such as in late 2017 and early 2021. While it's too early to assess the current cycle fully, the data suggests it’s likely to follow the same pattern, underscoring the speculative nature of cryptocurrency "adoption."
The rising price of Bitcoin and other cryptocurrencies is fundamentally driven by the "greater fool theory," where early speculators depend on finding a "greater fool" willing to pay a higher price. Crypto proponents argue that the surging prices are justified because cryptocurrencies represent a new asset class coming into its own and because Bitcoin, with its fixed supply, is a form of "hard money," unlike fiat currencies that are perpetually debased. However, the existence of over 15,000 other cryptocurrencies significantly undermines this claim. The reality is that anyone can create a cryptocurrency, making them plentiful and easily replicated—they are, essentially, a dime a dozen.
Past gains don’t prove that a cryptocurrency is a prudent investment going forward.
A frequent argument from Bitcoin and cryptocurrency proponents is this: Bitcoin is a rock-solid, wise investment going forward because it has delivered extremely high rates of returns in the past. This assertion is so simplistic and naive that it’s hard to know where to begin dismantling it. It should go without saying, but past performance is not indicative of future results. While Bitcoin did deliver impressive returns in the past, there’s absolutely no guarantee—and certainly no logical basis—for assuming those returns can be extrapolated into the future.
Contrary to popular belief, Bitcoin is not a magical, perpetual money-making machine designed to grow your wealth indefinitely. In fact, that’s far from what the pseudonymous Satoshi Nakamoto envisioned in the original white paper. History shows that investments with the highest past returns often become the worst performers moving forward, largely due to the principle of mean reversion. This overly simplistic and misguided mindset, so prevalent among crypto investors, leaves the space particularly susceptible to catastrophic outcomes.
This simplistic mindset is a classic example of the cognitive bias known as the "Turkey Illusion." In this scenario, a turkey destined for Thanksgiving is fed and cared for daily, leading it to grow increasingly confident that this routine will continue indefinitely, based on its past experiences. Ironically, the turkey's confidence is at its peak the night before its fate is sealed. The very person who nurtured it delivers the final blow, shattering the turkey's misplaced certainty. This serves as a stark reminder of how relying solely on past patterns can lead to devastating misjudgments.
MicroStrategy is essentially a Ponzi scheme centered around Bitcoin.
One of the most outspoken Bitcoin advocates is Michael Saylor, Founder and Chairman of MicroStrategy—a company now better known for its aggressive, leveraged Bitcoin purchases than for its software products. In fact, MicroStrategy’s core software business has struggled for years, often operating at a loss. Saylor and MicroStrategy are no strangers to speculative bubbles; during the late-1990s dot-com craze, the company’s stock skyrocketed by 4,437%, surging from $7.34 to $333 in less than a year. However, the euphoria was short-lived, as the stock subsequently collapsed by 99.2%, falling to $2.66—a level even lower than where it started before the mania.
MicroStrategy made headlines in August 2020 when, under Michael Saylor's leadership, it invested $250 million in Bitcoin as a treasury reserve asset. This bold move marked the beginning of a series of substantial Bitcoin purchases. By September 19, 2022, MicroStrategy and its subsidiaries had amassed approximately 130,000 BTC at a total cost of $3.98 billion. However, the company’s use of leverage to fund these acquisitions brought significant risks. In 2022, MicroStrategy came dangerously close to a margin call, as Bitcoin’s price approached the critical threshold of $21,000.
In October, MicroStrategy announced plans to raise $42 billion in fresh capital—split evenly between $21 billion in equity and $21 billion in fixed-income securities—for additional Bitcoin purchases over the next three years. This announcement, coupled with Bitcoin’s surging price, reignited investor enthusiasm for both MicroStrategy stock and Bitcoin itself, driving their prices even higher. In a flashback to the dramatic moves of 1999, MicroStrategy’s stock skyrocketed an astonishing 1,138% this year alone, soaring from $43.87 to $543.
MicroStrategy's leveraged Bitcoin purchases have effectively turned its stock into a leveraged Bitcoin ETF, appealing to investors looking to amplify Bitcoin's gains. While this strategy has proven highly lucrative during Bitcoin price rallies, leverage is a double-edged sword: if Bitcoin's price declines, MicroStrategy's stock will suffer even steeper losses, and the company will still be responsible for repaying its loans used to acquire Bitcoin. This poses a broader risk to Bitcoin itself, as MicroStrategy currently holds 402,100 bitcoins—valued at approximately $38.79 billion—which represents 1.915% of Bitcoin’s total supply.
Another significant risk lies in the overlap between MicroStrategy stockholders and the broader crypto community. Many investors hold both MicroStrategy stock and other cryptocurrencies, creating the potential for a cascading effect. If MicroStrategy’s stock were to plummet, these investors might be forced to sell their crypto holdings, triggering a downward spiral across the crypto market.
This risk is further amplified by the hefty 3x premium that MicroStrategy stockholders are paying over the actual value of the company’s underlying Bitcoin holdings—a premium that could vanish rapidly at the first sign of trouble or a shift in investor sentiment. At its core, MicroStrategy operates like a Ponzi scheme reliant on both its stock price and Bitcoin’s value remaining high and continuing to rise. This dependence introduces yet another layer of risk to Bitcoin and the cryptocurrency market as a whole.
Bitcoin is highly correlated with the Nasdaq, which is experiencing a massive bubble.
Although Bitcoin is often touted as "digital gold," in practice, it behaves more like a speculative risk asset, akin to high-growth tech stocks, rather than a safe haven like physical gold. This becomes clear when examining its price movements, which closely mirror those of the tech-heavy Nasdaq 100 Index. Over the past five years, Bitcoin has shown a striking correlation coefficient of 0.9 (on a scale from -1 to 1) with the Nasdaq 100, highlighting their strong and consistent relationship. Essentially, Bitcoin functions more like a leveraged Nasdaq ETF than the digital equivalent of gold.
So, what’s the issue with Bitcoin being highly correlated with the Nasdaq 100? The problem is that U.S. tech stocks are currently in the midst of a massive bubble, fueled by unprecedented stimulus from the Federal Reserve. Like all bubbles, this one is bound to burst, and when it does, Bitcoin is likely to be pulled down with it due to their close correlation. There are numerous metrics indicating that the Nasdaq is in the midst of a massive bubble, one of the most telling being its highly inflated price-to-sales ratio:
Another clear sign of the bubble in U.S. technology stocks is their inflated weighting in the S&P 500, which now surpasses even the peak levels seen during the 1999 dot-com bubble—an episode that ended in a market collapse:
A highly revealing measure of whether the overall stock market is in bubble territory is the total U.S. stock market capitalization-to-GDP ratio, which compares the market's total value to the underlying economy. This metric is often referred to as the "Buffett Indicator," as Warren Buffett has famously called it "the best single measure of where valuations stand at any given moment."
When the stock market grows faster than the economy, the stock market capitalization-to-GDP ratio rises—leaving the market vulnerable to a correction. Currently, this indicator stands at a staggering 206, which is 142% above its long-term average of 85, dating back to 1971. This suggests that the overall U.S. stock market is significantly overvalued and at risk of a severe downturn, as valuations historically tend to revert to the mean over time.
The strong correlation between Bitcoin and technology stocks is likely fueled in large part by the significant overlap in investors—individuals who are deeply enamored with and overly confident in modern technology. This group, I believe, is particularly vulnerable to being blindsided by the inevitable bursting of the tech stock bubble. When these investors are forced to liquidate their tech stock holdings and face job losses within the tech sector, it could create a cascading effect that strongly impacts the price of Bitcoin and MicroStrategy stock alike, driving both significantly lower.
Bitcoin and other cryptocurrencies are far too volatile.
While Bitcoin is often hailed as "digital gold" and promoted as a superior store of value, its extreme volatility tells a different story, with frequent, gut-wrenching bear markets. Over the past five years, Bitcoin's average daily, weekly, and monthly price fluctuations have been a staggering 4.76%, 9.42%, and 15.78%, respectively. And this level of volatility is for Bitcoin, the so-called "blue chip" of cryptocurrencies—smaller cryptos are even more erratic.
This extreme volatility is a key reason Bitcoin has failed to achieve its original purpose as a payment system, instead evolving into a playground for speculators seeking to profit from its dramatic price swings. Consider Walmart, a company that thrives on high sales volume and the ability to procure products at rock-bottom wholesale prices, resulting in an average gross profit margin of approximately 24%.
If Walmart were to accept payments in Bitcoin or other cryptocurrencies, the unpredictable swings in their value could easily erode or completely wipe out these profit margins. Such volatility introduces a level of financial risk far greater than traditional payment systems, with no added compensation for the increased uncertainty.
When it comes to Bitcoin as a store of value, its history of frequent and severe plunges—often exceeding 70%—introduces significant risk and uncertainty. While Bitcoin has rebounded from past crashes to reach new highs, there’s no guarantee this pattern will continue indefinitely. Despite the confidence of many Bitcoin enthusiasts, there’s no immutable law dictating that Bitcoin must keep appreciating over time. It’s worth noting that Bitcoin has only been around for 16 years, a relatively short history for any asset.
This volatility also makes Bitcoin particularly risky for those who allocate a large percentage of their wealth to it, especially older individuals who have less time to recover from substantial losses. In contrast, gold has demonstrated a much steadier trajectory as a store of value, rising nearly ninefold since 2000. While it may lack the speculative allure of Bitcoin, gold’s consistent performance offers a level of stability that Bitcoin has yet to achieve.
Unlike genuine safe-haven assets, Bitcoin sinks in response to geopolitical fears.
For further evidence that Bitcoin behaves like a risk asset than a safe-haven asset like gold, consider its consistent pattern of declining in response to geopolitical fears, while gold typically rises under the same conditions. A clear example occurred after the infamous October 7, 2023 attack on Israel (see the chart below) and has been repeated in subsequent geopolitical events, as I detailed in a recent article. This stark divergence underscores why Bitcoin should not be labeled "digital gold" or seen as a superior replacement for gold.
As a prepper and survivalist concerned about and actively preparing for a global economic crisis that will lead to societal upheaval, chaos, and war, this distinction is especially critical. Gold’s reliability as a safe-haven asset makes it a far more dependable choice for those seeking stability in uncertain times. Bitcoin, by contrast, fails to meet that standard. As I like to say, “Bitcoin is for the good times, not the End Times.”
The Bitcoin and overall crypto culture turns me off.
While this might seem petty, it’s actually not. I acknowledge that thoughtful, sophisticated individuals are involved in Bitcoin and crypto. However, they are often overshadowed by the stereotypical “crypto bros”—young, inexperienced, poorly educated, cult-like, overly cocky, brash, and immature, fixated solely on “gainz.” This starkly contrasts with those who originally embraced Bitcoin out of a sincere belief in sound money principles. The prevalence of this get-rich-quick “crypto bro” culture raises concerns that much of the crypto world is gripped in a massive bubble. It brings to mind the adage: “A fool and his money are soon parted.”
The crypto community is filled with sayings and adages that I find grating, as they often reveal an underlying immaturity and an obsessive fixation on quick and easy wealth. Here are just a few examples:
“Wen Lambo?”: A shorthand for asking when their favorite cryptocurrency will skyrocket and make them wealthy.
“To the moon” and “LFG” (let’s f*ing go!): Phrases that highlight an obsessive focus on getting rich quickly.
“Have fun staying poor!”: A dismissive retort aimed at skeptics, along with labels like FUDs, normies, Boomer, and no-coiners for anyone who dares to question their chosen cryptocurrency.
Merely questioning Bitcoin or cryptocurrencies often triggers a swarm of attacks from cult-like enthusiasts who treat crypto with a near-religious fervor. Rather than engaging in thoughtful discussion, they frequently resort to ad hominem attacks. Instead of trying to explain this dynamic, let me show you. Below are a few recent posts I made on X that sparked an onslaught from the crypto community—responses that largely ignored my assertions and devolved into personal attacks. (Click the links and read the comments to see for yourself.)
A significant blind spot among many "crypto bros" is their relative youth—often under 30—which means they lack firsthand experience with a prolonged bear market in risk assets. Many are unaware of, or too young to remember, pivotal financial events like the late-1990s dot-com bubble or even the global financial crisis of 2008. Even if they are aware of those major financial events, they often view them as distant anomalies unlikely to repeat.
Many of these speculators came of age during the ZIRP (zero interest rate policy) and QE (quantitative easing) era post-2008, a time when nearly every financial asset rose steadily year after year. Unfortunately, I believe a significant downturn is looming—one that will clear out much of the froth and malinvestment that has accumulated since 2008. To put it mildly, this will be a stark departure from the environment most "crypto bros" have grown accustomed to.
The proliferation and trading of altcoins and memecoins.
This gripe ties back to points #1 and #11. My issue is that virtually anyone can create an altcoin (a cryptocurrency other than Bitcoin) or a memecoin (a cryptocurrency designed to be humorous, often inspired by memes and pop culture). As a result, there are thousands of these coins, the vast majority of which serve no purpose beyond speculation.
Shockingly, many of these frivolous memecoins have astonishingly high market capitalizations—for instance, Dogecoin at $64 billion, Shiba Inu at $18 billion, Pepe at $11 billion, Peanut the Squirrel at $1.3 billion, and even Fartcoin at $332 million. For perspective, these market capitalizations rival or surpass those of established companies with real earnings, such as Target at $63 billion, General Motors at $58 billion, Moderna at $18 billion, Owens Corning at $17 billion, and JetBlue Airways at $2.38 billion.
When Donald Trump won the presidential election last month, it sparked a frenzy among speculators, who gleefully bid up absurd memecoins like Dogecoin and Fartcoin, which skyrocketed approximately 1,600%. Meanwhile, gold prices were sharply driven down—a perfect illustration of the irrational, short-sighted mindset dominating the market today. Ironically, this foolish behavior occurring as we speak is a compelling argument for buying gold instead!
Another example of the speculative memecoin frenzy since the election is the case of a 13-year-old who created a coin, pumped and dumped it, pocketed $30,000, and promptly ended the livestream. This incident highlights just how easy it is for anyone to create a cryptocurrency—and the alarming willingness of a large swarm of speculators to buy into even the most absurd and meaningless coins and tokens.
Then there’s Hailey Welch, better known as the "Hawk Tuah Girl," who attempted to cash in on her viral fame by launching a memecoin called “HAWK.” The coin’s market capitalization skyrocketed to $500 million before crashing to just $28 million, reportedly earning her several million dollars in the process. However, the move left her facing backlash from fans and potential legal troubles that remain unresolved. I knew that wasn’t going to end well.
There are countless examples of crypto shenanigans that could fill an entire book, far too many to detail here. While many Bitcoin purists try to distance themselves and their cryptocurrency from the memecoin frenzy, the reality is that Bitcoin opened Pandora's Box, paving the way for this speculative mania. The rapid proliferation of altcoins and memecoins highlights just how easy it is to create a cryptocurrency that competes with Bitcoin for capital—underscoring their ephemeral and flimsy nature.
Moreover, there’s significant overlap between Bitcoin investors and memecoin enthusiasts. When the crypto bubble inevitably bursts, many memecoins will likely collapse in value, and Bitcoin may not emerge unscathed. Such a downturn could tarnish Bitcoin’s reputation and credibility. One day, finance classes in business schools may study this crypto mania as a cautionary tale of what went wrong.
Crypto hacks and scandals.
Cryptocurrency-related hacks and scandals have become a persistent and alarming issue. So far this year, 30 reported hacks have resulted in losses totaling $1.49 billion, adding to the staggering $1.7 billion stolen in 2023 and $3.8 billion in 2022. The history of crypto hacks stretches back to major incidents like the infamous 2014 Mt. Gox heist, where approximately 850,000 bitcoins—worth an estimated $90.52 billion at today’s prices—were stolen, forcing the exchange into bankruptcy.
More recently, the collapse of Sam Bankman-Fried's FTX crypto exchange in November 2022 sent shockwaves through the industry, as the once $32 billion platform crumbled as its massive fraud came to light. Beyond these high-profile cases, countless smaller hacks and scandals continue to plague the crypto space, with no indication that this troubling trend will end anytime soon—especially with the advent of quantum computing, which poses a significant threat to the security of cryptocurrency by making it easier to breach cryptographic protections.
While I understand that the common advice to protect against cryptocurrency exchange hacks is to store your assets offline, these recurring hacks and scandals still fail to inspire confidence. For me, they represent yet another question mark and reason to doubt the long-term viability of crypto. The true vulnerability of cryptocurrencies is difficult to assess without advanced IT or computer science expertise, leaving the average person at a significant disadvantage. This highlights a broader issue: crypto's heavy reliance on complex and relatively new electronic technology. In contrast, gold and silver offer simplicity—a virtue in these increasingly complex and uncertain times.
Bitcoin and crypto haven’t been tested by a powerful bear market or financial crisis.
Bitcoin and cryptocurrency gained mainstream traction during one of the most powerful secular bull markets in history. During this period, the benchmark S&P 500 surged nearly tenfold, while the tech-heavy Nasdaq 100 soared almost twentyfold. Simultaneously, nearly every asset class, from housing to bonds, experienced significant gains. Over the past 15 years, it was almost impossible not to make money—virtually anyone could buy a random stock, property, or cryptocurrency and see their investment grow substantially.
Seeing an investment rise during a secular bull market isn’t particularly impressive—after all, as the saying goes, “a rising tide lifts all boats.” The real stress test for Bitcoin and cryptocurrencies will come during an inevitable strong bear market or financial crisis, akin to the bursting of the dot-com bubble in the early 2000s or the 2008 Global Financial Crisis. My assumption is that they would likely take a significant hit, given their strong correlation with tech stocks and other risk assets, as I previously explained.
Bitcoin and crypto haven’t stood the test of time.
Many Bitcoin and cryptocurrency investors—many of whom are quite young and inexperienced—believe that Bitcoin and crypto are inherently superior to gold and silver simply because they represent new technology and innovation. Their reasoning follows a simplistic heuristic: newer is better. However, this line of thinking falls into a logical fallacy known as argumentum ad novitatem, which assumes that something is better merely because it is new or modern. This fallacy, also referred to as the appeal to novelty or appeal to modernity, overlooks the enduring value, simplicity, and reliability of gold and silver.
While it’s equally important to avoid the converse fallacy, argumentum ad antiquitatem—the belief that something is better simply because it’s older—the reality remains that Bitcoin and cryptocurrencies have only been around for 16 years. In that short time, Bitcoin has shifted from its original purpose as a digital currency for day-to-day transactions to becoming primarily a vehicle for speculation and investment.
As I mentioned earlier, the crypto boom occurred during an unprecedented financial market boom, where nearly every asset class soared—a remarkably forgiving and frothy environment. Cryptocurrencies have yet to face a true stress test during a severe financial crisis or tech stock bust. How would they hold up? Could a blowup of MicroStrategy or Tether trigger a domino effect and take down the entire crypto market? These are valid questions that remain unanswered.
The Trump Administration and its pro-crypto advisors are overly confident and premature in their push to go all-in on cryptocurrency—an untested and highly volatile asset. Proposals to establish a strategic Bitcoin reserve, position the United States as the “crypto capital of the planet,” and even sell America’s gold to buy Bitcoin are particularly concerning and foolish. These ideas completely sideline gold and silver, which have been reliable stores of wealth for over six thousand years. It seems as though they are simply being drawn to the latest sexy, shiny object, while ignoring the proven stability of traditional assets. The reality is that there is no guarantee that Bitcoin will keep rising year after year like a perpetual money-making machine.
Nobody truly knowns what cryptocurrencies are worth or how to value them.
Cryptocurrencies, including Bitcoin, are still in their infancy, and their prices have been wildly volatile. As a result, no one truly knows what their fair value should be. Should Bitcoin be worth $5,000, $25,000, $100,000, or even $1 million? The truth is, no one knows—and anyone claiming otherwise is being disingenuous. This uncertainty creates significant risk. What if you—or the U.S. government or a public corporation—go in on Bitcoin at $100,000, only to see it stabilize at $50,000 or even plummet to $10,000? This unpredictability is one of the key reasons I struggle to feel confident or convinced by it as an investment.
Traditional assets like stocks, bonds, and real estate generate cash flow, allowing them to be valued through methods such as discounted cash flow (DCF) analysis and metrics like price-to-earnings (P/E), price-to-sales (P/S), and price-to-book ratios. While gold and silver don’t produce cash flow, their extremely long history, relative price stability, and strong relationship to money supply measures provide a basis for assessing whether they are undervalued, fairly valued, or overvalued.
Crypto proponents often cite Metcalfe’s Law to justify the value of cryptocurrencies. This principle states that the value of a network is proportional to the square of its active users—essentially, the more people using a cryptocurrency, the greater its value. However, there are significant flaws in applying this to cryptocurrencies as opposed to social networks, for example. The majority of crypto users are traders and speculators, not individuals using the cryptocurrency for legitimate day-to-day transactions as originally intended.
Another popular method for valuing cryptocurrencies is comparing their price to the cost of mining, based on the idea that a cryptocurrency like Bitcoin shouldn’t trade below its production cost for long. If it did, mining would become unprofitable, potentially halting operations and undermining the network's ability to function securely and efficiently.
However, this method shares a key flaw with the Marxist labor theory of value (LTV), which argues that the value of a good or service is determined by the labor required to produce it. This approach overlooks market demand; for instance, an obscure work of art that took hundreds of hours to create might still hold little value if no one desires it. Similarly, a cryptocurrency isn’t inherently valuable simply because significant electricity and computing power were expended to mine it.
Cryptocurrencies are heavily reliant upon the internet and electrical grid.
As a prepper and survivalist preparing for a global economic crisis that will lead to societal upheaval, chaos, and even war, one of the main reasons Bitcoin and other cryptocurrencies have never appealed to me is their heavy reliance on the internet and electrical grid. In a serious crisis, there’s a strong likelihood that both could fail or become unreliable, rendering cryptocurrencies inaccessible and effectively useless. In contrast, the low-tech simplicity of gold and silver becomes a significant advantage, as they require no infrastructure to hold, trade, or preserve wealth.
Throughout history, gold and silver have proven invaluable during times of emergency and societal collapse. For example, British soldiers in World War II were issued gold coins to bribe their way out of dangerous situations if captured by the enemy. Similarly, Vietnamese refugees in the 1970s used gold to transport their wealth out of war-torn Vietnam. More recently, gold has served as a means to preserve wealth and facilitate transactions for Venezuelans and Argentinians during their respective economic and currency crises.
Cryptocurrencies are part of a broader dystopian trend that encourages us to embrace the virtual over the physical, distancing us from tangible assets and realities.
This point is more philosophical but no less important. Over the past generation, the digital and information revolution has driven rapid social and cultural changes—many of them for the worse. A key example is how people, particularly younger generations, have increasingly disengaged from the physical, real world that humans have inhabited for millennia. Instead, they now spend much of their time in virtual spaces dominated by screen-based entertainment, smartphones, social media, TikTok, AI, video games, Snapchat, Pornhub, OnlyFans—and soon, the Metaverse (shudder).
Not long ago, kids would ride bikes, explore the woods for hours, and engage with the outdoors. Today, many remain indoors, mesmerized and stupefied by social media and interacting with friends online instead of face-to-face. This shift is not a healthy direction for society and reflects a troubling detachment from the tangible, meaningful experiences that once defined daily life. This is a key factor behind the surge in mental illness among young people since the widespread adoption of smartphones and social media.
A significant portion of crypto investors and traders are young people who grew up in the hyper-online era and have never known anything different. This unusual upbringing is a major reason why they gravitate toward cryptocurrencies—intangible, virtual assets—over real, physical stores of value like gold and silver. However, many of these young investors lack the historical perspective, life experience, and wisdom to recognize that virtual assets and experiences are often more fragile and fleeting compared to physical assets that have proven their durability and reliability over centuries.
There is reason to believe that the shift from the physical world to the virtual world is intentional, driven by power elites attempting to socially engineer society in that direction. For example, consider the World Economic Forum’s (WEF) alarming slogan, “You’ll own nothing, and you’ll be happy.” This sentiment aligns with broader trends: the soaring cost of housing and raising children, coupled with younger generations increasingly embracing minimalism and choosing childlessness. Together, these factors suggest a deliberate push toward a future where ownership and physical engagement are replaced by inferior virtual substitutes.
To me, this trend is deeply nefarious and dystopian, with cryptocurrencies being a key part of it. On principle, I want to resist this shift being imposed by the power elites. If they want us to live increasingly virtual lives, I choose to do the opposite: unplugging from the digital world (as much as possible), spending time outdoors, fostering meaningful in-person interactions and relationships, and holding tangible assets like gold and silver. This aligns with my broader philosophy of “rejecting modernity and embracing tradition” including leaving behind the chaos of big cities for a more peaceful and grounded life in the countryside. And I’m certainly not alone in feeling this way; this sentiment is part of a growing movement.
Cryptocurrencies are paving the way for Central Bank Digital Currencies.
As society becomes increasingly conditioned by powerful elites to reject the physical world in favor of a digital, virtual existence, there has been a significant push toward a cashless society and the introduction of central bank digital currencies (CBDCs). These currencies share many of the same principles as cryptocurrencies. In fact, it is the public’s growing trust in and familiarity with cryptocurrencies that has paved the way for the push toward CBDCs and their potential widespread adoption.
Proponents of central bank digital currencies (CBDCs) highlight their benefits, such as eliminating the need for physical cash, reducing transaction costs and times, and combating criminal activity through enhanced digital monitoring. However, the potential for misuse is deeply alarming. CBDCs pose a significant threat to privacy and open the door to abuses, including political oppression—such as freezing access to funds for opponents or dissenting voices. Imagine, for instance, how totalitarian regimes like the Soviet Union, the Khmer Rouge, or Nazi Germany could have wielded CBDCs as powerful tools to control and silence their populations. The implications are chilling, and CBDCs represent a very dangerous idea that must be resisted at all costs.
Bitcoin lacks privacy and anonymity.
Although Bitcoin is clearly not being used as originally intended—as a digital currency for day-to-day transactions—one key reason is its lack of true privacy and anonymity. While often described as pseudonymous, all transactions are recorded on a public ledger for anyone to see. This poses significant problems for corporations, governments, and individuals who require discretion in their financial dealings. As a result, Bitcoin has largely been relegated to a vehicle for speculation and investment rather than practical use. This raises an important question: what is its true purpose to begin with?
Bitcoin’s mysterious—and possibly shady—origins.
The truth is, almost no one knows who actually invented Bitcoin and launched the cryptocurrency era. The original 2008 Bitcoin white paper was authored by an anonymous individual or group under the pseudonym Satoshi Nakamoto. Over the years, various people have been speculated to be Satoshi, and some have even claimed the identity themselves. Yet, 16 years later, we are no closer to uncovering the true identity of Satoshi. This enduring mystery has always struck me as unsettling and undermines my confidence in Bitcoin.
There are also conspiracy theories surrounding Bitcoin’s origins that, given the significant—and completely justifiable—erosion of trust in government, media, and major institutions over the past 15 years, shouldn’t be dismissed outright. One theory points to a 1996 paper published by the U.S. National Security Agency (NSA) titled "How to Make a Mint: The Cryptography of Anonymous Electronic Cash." Interestingly, one of the sources cited in the paper is Tatsuaki Okamoto—a name that bears a striking resemblance to Satoshi Nakamoto.
Another theory posits that Bitcoin was created by the Central Intelligence Agency (CIA), citing the translation of Satoshi Nakamoto in Japanese, which roughly means "Wisdom of Center Origin"—a name that some interpret as a subtle nod to CIA involvement.
If Bitcoin was indeed created by the NSA or CIA, possible motives might include laying the groundwork for central bank digital currencies (CBDCs) or introducing cryptocurrencies as a relief valve for the inflationary pressures anticipated from the Federal Reserve’s new quantitative easing (QE) programs—essentially digital money printing. Notably, the QE era began in November 2008, just weeks after the release of the original Bitcoin white paper.
The QE relief valve theory seems plausible to me, given that approximately $8 trillion was created through quantitative easing in just over a decade—excluding QE programs launched outside the United States. Without Bitcoin and cryptocurrencies, which now boast a combined market capitalization of $3.84 trillion, a significant portion of that newly created money might have flowed into commodities (including gold and silver), which are an inflation hedge. This would have driven up food and energy prices dramatically, potentially triggering a far more severe inflation crisis than what we experienced.
I’ll conclude this point with a post that echoes my sentiment:
Cryptocurrencies are a diversion and distraction from gold and silver.
Gold and silver have been reliable stores of wealth for over 6,000 years, and their effectiveness hasn’t suddenly diminished in the Information Age. There’s nothing outdated or obsolete about these time-tested assets—“if it ain’t broke, don’t fix it.” That said, there is potential to modernize and streamline their use, such as through the creation and adoption of precious metals-backed cryptocurrencies, which could combine the stability of gold and silver with the convenience of digital technology.
Until around 2012 or 2013, the libertarian and sound money community was largely unified in its support for gold and silver as the best hedges against fiat currency debasement and inflation. However, the emergence of cryptocurrencies—the latest "sexy, shiny object"—created a rift, dividing the community into two main camps: traditionalists who remained loyal to gold and silver, and those who embraced cryptocurrencies. The latter group believed that gold and silver had been rendered obsolete by technology and championed Bitcoin as the "new gold" (and I don’t agree with that assessment).
I believe this division has been counterproductive for the cause of sound money. The sound money community should have remained united and steadfast in its support for gold and silver. This fragmentation has weakened our movement, effectively handing a gift to Keynesians and others who either reject or actively seek to undermine the principles of sound money.
For decades, governments, central banks, and mainstream economists have consistently attacked and devalued precious metals. Now, cryptocurrency enthusiasts echo similar sentiments, further eroding the foundation of our cause. Moreover, the speculative, scammy, and get-rich-quick aspects of the crypto space—particularly with meme coins—not only undermine but also make a mockery of the credibility of the sound money movement.
Additionally, the trillions of dollars that have poured into cryptocurrencies could have been directed toward gold and silver, significantly driving up their value and enhancing their appeal as both a means of generating returns and a hedge against inflation.
Gold and silver are creations of God, while cryptocurrencies are creations of man.
This is not going to be a popular argument in today’s world, but I’m going to say it anyway—because what’s popular is often wrong, and what’s right is often unpopular. I firmly believe that God is real, as I’ve outlined with abundant evidence in a recent essay. I favor gold and silver because they are creations of God, who is perfect, whereas cryptocurrencies are the inventions of man, who is deeply flawed.
Similarly, I—and many others—find peace and tranquility in nature, a divine creation, compared to cities, which are human-made. Cities, by their very nature, tend to be dirty, polluted, overcrowded, crime-ridden, stressful, and filled with aggression, noise, and anxiety. This contrast reflects a broader truth about the difference between what God creates and what humans construct, and I believe it applies directly to cryptocurrencies.
Unlike gold and silver, cryptocurrencies are not beautiful.
One of the key reasons humans across countless cultures and eras have consistently gravitated toward gold and silver as money is their exquisite beauty—a quality tied to their divine origin, as mentioned earlier. In stark contrast, cryptocurrencies, creations of man, are generated through utilitarian lines of computer code, akin to the software behind the notes app on your smartphone. While their design may be technically impressive, cryptocurrencies will never evoke the same passion or inspire artistic expression as gold and silver, which have adorned human art and culture for millennia.
Now that I’ve outlined my 24 reasons for never fully trusting or becoming a true believer in Bitcoin and cryptocurrencies, I feel it’s necessary to provide further clarifications. I’m addressing these points preemptively, anticipating the criticisms I know are likely to follow.
As I said earlier, I trade cryptocurrencies and have made many successful bullish tactical calls, but I am just not sold on it as a long-term investment.
In the past, when Bitcoin’s price was much lower—around $400—I supported holding some as a portfolio diversifier. However, at today’s significantly higher prices, I am far more cautious and skeptical.
Just because I’m not convinced by Bitcoin or other cryptocurrencies doesn’t mean I’m advocating shorting them or predicting an imminent crash. I fully acknowledge the possibility that prices could skyrocket from here—even if driven by sheer irrational exuberance alone. However, they could just as easily crash after reaching those heights. The reality is, there are far too many unknowns to make definitive predictions.
As a proponent of free markets, I support the right of cryptocurrencies to exist free from government interference. I also welcome the emergence of alternatives to fiat currencies.
I often hear Bitcoin maximalists claim, “Bitcoin isn’t crypto,” but that argument doesn’t make sense to me. Bitcoin is undeniably a cryptocurrency—it’s the one that started the entire crypto phenomenon. This assertion is essentially a variation of the “No True Scotsman” logical fallacy.
Considering all of the information I’ve laid out in this report, here are my recommendations:
Don’t dismiss or shut down the concerns raised by Bitcoin and cryptocurrency skeptics. Many of our points are valid and deserve thoughtful consideration, yet they are often minimized or ignored by the crypto community.
Don’t lose faith in gold and silver or abandon them in favor of diving headfirst into crypto investments. Many people are making this mistake right now, and it will prove costly in many cases.
Under no circumstances should America’s gold reserves be sold to purchase Bitcoin, as proposed by Wyoming Senator Cynthia Lummis and Michael Saylor. There is a troubling precedent for governments selling their gold reserves, only to witness a significant surge in gold prices shortly afterward—such as the United States in 1978 and the United Kingdom in 1999.
Conduct a thorough audit of America’s gold reserves and actually acquire more—including adding silver as well—following the lead of Asian nations that wisely recognize the enduring value of precious metals.
Delay the creation of a United States strategic Bitcoin reserve until Bitcoin has demonstrated its reliability over a longer period—including having been stress-tested by a strong bear market and recession. Moreover, the government should refrain from actively promoting the crypto industry and cryptocurrencies. Let the crypto industry develop independently without government involvement.
Thank you for reading my report and considering my ideas.
Sincerely,
Jesse Colombo
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It's no easy task to write a report of this length...
Thank you very much for writing such a detailed report!
I will continue to wait patiently for the price of silver to rise.
Excellent article. Years ago I was quite optimistic about the sound money aspect of btc... and made a little profit along the way, but when the KYC started and then the wall st cartel started taking over on/off ramp infrastructure.. and then the whole Tether situation.. I was done.
As the above comment said, it must have been alot of work to write such a long article.. Thank you. I will upgrade.