Bitcoiners are crying foul at former billion-dollar hedge fund manager Jesse Felder’s “inaccurate” hot take blog post about Bitcoin today in which he claims the crypto asset “doesn’t make sense as an investment nor as a currency alternative.” Bitcoiners seemed taken aback by the number of factual inaccuracies in the post coming from someone working in finance.
In the Nov. 18 post on his financial blog titled “Please Stop Asking Me About Bitcoin,” Felder claims Bitcoin (BTC) is not used as a medium of exchange, nor does it provide any store of value. He also questioned the value of one of the key features of the cryptocurrency — its scarcity, with only 21 million possible coins — by claiming that hard forks are “multiplying the number and type of Bitcoins in circulation.”
“If you put together all the hard forks Bitcoin has undergone since it was first created, the number of total Bitcoins has actually grown faster than the number of dollars,” said Felder. “That’s a fact.”
NEW POST: Please Stop Asking Me About Bitcoin https://t.co/xkD8no6lgr
— Jesse Felder (@jessefelder) November 18, 2020
However, it’s not a fact unless you mistake BCH or BSV as part of the Bitcoin supply. Coin Metrics co-founder Nic Carter was quick to correct this, stating that “almost everything in this post is wrong” and pointed out that “hard forks did not dilute Bitcoin.”
The former hedge fund manager also claimed that Bitcoin could “be supplanted by a better cryptocurrency” that hasn’t been created yet. More than one Twitter user said that this would be “highly unlikely” due to network effects.
Felder also seemed to be operating under the belief that the Bitcoin network itself had been attacked, rather than insecure exchanges or wallets with poor security, when he claimed “millions of dollars worth of Bitcoin has been hacked.” He continued:
“Bitcoin may make a great deal of sense as a speculation. Ponzi schemes can work out great for early adopters.”
Felder’s confident assertions about Bitcoin had many Twitter users champing at the bit to set him right.
Bitcoin bull Anthony ‘Pomp’ Pompliano was one of the first to respond, calling Felder’s words “really inaccurate” and offering to educate the former hedge fund manager over a phone call. Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, followed suit, stating Felder was “too lazy to do the research” and out of his depth.
It has been hacked. Wrong.
Forks multiply it’s supply many times. Wrong.
It is not a store of value. Wrong.
It could be supplanted by a better crypto. Wrong. Google Metcalfe’s law.
Doesn’t provide safety of principal. Wrong.
Doesn’t provide an adequate return. Wrong.
— Lawrence Lepard (@LawrenceLepard) November 18, 2020
Part of Felder’s apparent confusion may be due to him stating he relied on an “old school definition” of investments, however the fact is that hard forks do not affect the total Bitcoin supply of 21 million coins. While hackers are able to steal coins from time to time, these crimes are usually limited to exchanges and custodians, phishing attempts, and misplaced private keys — not the Bitcoin network itself.
“Better to have no opinion than a poorly reasoned one,” said Twitter user anilsaidso.