The New York Times still doesn’t understand Bitcoin | CoinDesk JAPAN

New York Times financial columnist Jeff Sommer doesn’t seem to like Bitcoin (BTC) ETFs. But he is the one who becomes the laughing stock. Because everyone else seems to like it.

The Bitcoin ETF has collected approximately $1.9 billion (approximately 281 billion yen, equivalent to 148 yen to the dollar) in at least the first three days of trading. The most bullish forecasts call for up to $100 billion to flow into Bitcoin ETFs by the end of the year.

This is bigger demand than the ProShares Bitcoin Strategy ETF, a Bitcoin futures-based financial product that saw inflows of $1.2 billion in three days in 2021, Reuters reported.

Dismissed as a product of “FOMO”

Several financial giants have jumped into Bitcoin ETFs, including BlackRock, Fidelity, and Franklin Templeton, and are now considering Ethereum (ETH) ETFs as well. But Sommer seems willing to dismiss all this as meaningless.

“FOMO (Fear of Missing Out) is the main reason people put money into Bitcoin. “We don’t have a FOMO policy,” Sommer argued in his newsletter Strategies, citing the Securities and Exchange Commission’s (SEC) anti-FOMO stance.

FOMO is certainly an aspect of crypto investing. For example, FOMO is the main driver behind traders chasing high prices in meme coins like BONK and dogwifhat, which have little economic function other than speculation.

But viewing Bitcoin simply as a gamble with an $800 billion market cap is self-indulgent and misleading.

You don’t have to personally believe what Bitcoiners believe just because you fear being ridiculed or ostracized by crypto skeptics.

Indeed, Sommer expressed respect for the technology behind Bitcoin, as follows:

“Bitcoin is a serious proposition in terms of its fundamental structure. The use of blockchain, the decentralized peer-to-peer structure, and the complex mathematical code demand respect. Bitcoin and other so-called crypto assets The concepts incorporated in this may at some point have important implications in the real world…”

Mr. Sommer’s completely original and innovative opinions don’t stop there. Mr. Sommer also argued that while cryptocurrencies may have some “real world” utility someday, they are not really “currency” and are therefore mistaken. He claimed that it was a nickname. He also said that comparing Bitcoin to gold is wrong because gold has a historical track record.

In other words, as Satoshi Nakamoto once said, “If you don’t believe me, if you don’t understand me, I’m sorry, but I don’t have time to convince you.”

It’s not worth covering the same tired arguments that seasoned journalists put out every time a crypto asset wins.

However, given the newness of Bitcoin ETFs, I thought I would provide an update for Mr. Sommer on why the interest in Bitcoin ETFs is more than just FOMO.

Why Bitcoin ETF?

First, there is a philosophical proposal for Bitcoin. The idea is that there should be a global, stateless monetary network available to everyone.

Although often referred to as a libertarian’s pipe dream, Bitcoin’s vision is very simple and can be interpreted in a variety of ways, from globalizing neo-conservatism to historical Marxism, unless it is truly authoritarian. fits well with political philosophy.

Again, you can be interested in Bitcoin without jumping on board with the rising tide of populism. Against a backdrop of widespread corporate and government surveillance, widening economic disparity, and other geopolitical issues, something like Bitcoin that empowers everyone without demanding anything in return from any one user is becoming increasingly important. Many feel it is at least a powerful symbol.

Second, there is the fact that Bitcoin is one of the most successful economic investments on record. It may not be the best-performing asset every year, and it’s true that many people lose money trading Bitcoin. However, there is no denying Bitcoin’s rapid growth over the past 15 years.

This is where the idea of ​​“HODLing” comes into play, which encourages people to buy Bitcoin and hold it for the long term. This is because even if Bitcoin, which is always highly volatile, falls, it will only be an unrealized loss until you sell it.

Bitcoin ETFs are a way for individual and institutional investors to invest in Bitcoin through vehicles that are likely to be held for years, if not decades, such as retirement accounts or corporate assets. Support accessing coins.

To be sure, Bitcoin is not guaranteed to rise and could even drop to $0. Also, as Sommer points out, traditional index products that invest in crypto-related stocks such as Coinbase, MicroStrategy, or many publicly traded mining companies can also be used. There are also ways to gain exposure to crypto assets.

Simply put, the idea of ​​actually owning an asset that cannot be seized is powerful (and in that regard, a Bitcoin spot ETF is a powerful one, since ETF buyers never actually get their hands on the Bitcoins). It is sufficient).

But Sommer is quick to shut down those ideas, trying to convince readers that the huge interest in Bitcoin, evidenced by the launch of 11 Bitcoin ETFs this month, is all just FOMO. .

Sadly, this argument is just as valid the other way around. This means that it is even more important to carefully check information and sources.

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: Cheyenne Ligon/CoinDesk
｜Original text: The New York Times Still Doesn’t Get Bitcoin