Bitcoin has been called many things over its 10-year lifespan. A tool for tax evaders and drug dealers, check. The world’s next safe haven, sure. But most notably, the cryptocurrency has been labeled a “Ponzi scheme” by its thousands, maybe millions of skeptics.
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An Italian newspaper, one of the largest in the region, continued this trend just recently. As spotted by a Reddit user, the publication released a column bashing Bitcoin, no holds barred. The thing is, this comes as the Euro, and the European Union more broadly, has begun to exhibit signs of a precarious recession.
Bitcoin is Anything But a Ponzi Scheme
Cryptocurrency is in a war against the fiat money system and companies attached to it. And it seems that the latter is pulling out the big guns — the mainstream media.
Shared first by a Reddit user on the Bitcoin subreddit, La Repubblica, an Italian publication with hundreds of thousands of readers, published an article deeming BTC a “pyramid”, adding that there was no guarantee it would hold its value. A roughly translated excerpt from the start of the piece reads:
“Bitcoin, like Ethereum and most of the existing cryptocurrencies, has no underlying asset or guarantee. […] [T]he functioning of Bitcoin is much more similar to that of a pyramid scheme than to that of a currency system.”
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Backing its claims, La Repubblica looks to the fact that there is a centralization of wealth in BTC, with a small number of wallets holding a large portion of the coins.
It writes that if money doesn’t continue to siphon into the market, BTC’s value will fall overnight, citing the fact that miners need to sell their coins to keep the lights, and thus their ASIC miners, online.
What the writer seems to be referring to is not a Ponzi scheme, it’s how most modern assets operate. A majority of owners and board members of some of the world’s largest companies could be defined as the “1%”. And if stocks, bonds, or commodities don’t see demand, they too will lose value, just like Bitcoin would in a world where cryptocurrency dies off.
Also, the centralization in BTC wealth was a byproduct of the adoption curve, not a marketing sham that benefits the early-adopters.
A Needle in a Haystack
The odd thing is that this article comes as some big names in mainstream media and economists alike have begun to give Bitcoin some much-needed nods.
In a recent article, The Financial Times, which is a prominent business news outlet read by some of the world’s most prominent investors and funds, recently lauded Bitcoin as a “potential” safe haven asset. As cryptocurrency analyst Ari Paul wrote, Bitcoin has begun to “gradually enter the mainstream financial discourse”, which is crazy bullish, to say the least.
A few days after this article was posted, Jim Iuorio of CNBC, a CME trader, lauded BTC on public television, revealing that he has begun to acknowledge the cryptocurrency as a viable alternative to fiat.
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And who could forget Tyler Cowen, an economist that frequents Bloomberg’s op-ed column. In a recent article, Cowen gave four reasons why he believes Bitcoin will succeed, which caught many aback, as he was previously cynical that BTC was needed. A number of those reasons mentioned Bitcoin’s viability as a hedge against populism and geopolitical unrest.
Euro on the Decline
This scathing article, which doesn’t seem to hold its water, comes as the Euro, the go-to currency in Italy, is purportedly on the verge of entering a drastic nosedive — a “death spiral” if you will.
Big, important thread alert:
There is a lot going on in Europe that feels like it’s coming to a head soon… probably by the end of the summer. The EU economy is in mild recession… pic.twitter.com/OZPM6qfMKa
— Raoul Pal (@RaoulGMI) July 7, 2019
As explained in an extensive Twitter thread by Raoul Pal, the founder of crypto-friendly media outlet and investment research startup Real Vision, the European Union’s economic data is extremely harrowing.
European-centric banks are shedding profits at a crazy rate, which has materialized in mass layoffs; some sovereign bond yields have flipped negative; and inflation expectations have collapsed entirely. Pal points out that it now makes sense to purchase Bitcoin to hedge against risk.
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