Research Study

Revisiting Persistent Bitcoin Criticisms

An updated response to common Bitcoin criticisms

by Fidelity Digital Assets

In November 2020, we highlighted some of the most common Bitcoin criticisms that were sourced from our regular conversations with institutional investors and observation of public commentary on Bitcoin. More than three years later, Bitcoin not only remains the largest digital asset by market capitalization, but continues to grow as a monetary network.

In this piece, we address common Bitcoin criticisms and misconceptions—some legitimate, some debunked. First, we revisit criticisms we’ve covered in 2020, which have been refuted many times over:

  • Bitcoin is too volatile to be a store of value.
  • Bitcoin has failed as a means of payment.
  • Bitcoin is wasteful and/or bad for the environment.
  • Bitcoin will be replaced by a competitor.
  • Bitcoin is not backed by anything.

The original criticisms above are those we believe can be refuted or are unlikely to be a serious concern. However, we believe that there are a few legitimate concerns that have some, even if small, probability of occurring and, therefore, investors should be aware. These include:

  • A bug in Bitcoin’s code could render it worthless.
  • Regulations will slow Bitcoin adoption.
  • People could lose interest.
  • There are “unknown unknowns."
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