NY Times Misunderstands Bitcoin: A Deep Dive

• Jeff Sommer's Stance on Bitcoin ETFs
• Pent-Up Demand for Bitcoin ETFs
• Prominent Financial Firms and Bitcoin ETFs
• Sommer's Bitcoin Criticism
• Sommer's Recognition of Bitcoin's Underlying Technology
• Concluding Thoughts

Jeff Sommer's Stance on Bitcoin ETFs

Jeff Sommer, a seasoned finance columnist with The New York Times, appears to hold a negative view towards Bitcoin$42,260 -0.64% ETFs. This opinion, however, seems to contrast with the general attitude, as most others appear to be in favour. Although the most recent data isn't available, we know that investors have invested a minimum of $1.9 billion into crypto-tracking exchange-traded funds within the initial three days of trading. The most optimistic projections anticipate up to $100 billion being channeled into Bitcoin-oriented funds by year-end.

Pent-Up Demand for Bitcoin ETFs

The demand for Bitcoin ETFs has been substantial, with record inflows of $1.9 billion within the first three days, surpassing the previous record of $1.2 billion in 2021 which was also directed towards a bitcoin product, the ProShares Bitcoin Strategy ETF. It's worth noting that this ETF tracked bitcoin futures rather than its actual price.

Prominent Financial Firms and Bitcoin ETFs

Several top-tier financial institutions, including BlackRock, Fidelity, and Franklin$0.0015 -3.24% Templeton, have shown interest in launching Bitcoin ETFs. They are also considering introducing ether (ETH) funds. Despite this, Sommer appears prepared to disregard all of these developments.

Sommer's Bitcoin Criticism

In his latest edition of the Strategies newsletter, Sommer criticizes Bitcoin, stating that FOMO, or the fear of missing out, is the primary reason for investing in the cryptocurrency, which he deems speculative without a clearly definable economic function. He cited the U.S. Securities and Exchange Commission's (SEC) anti-FOMO bulletin in his argument.

While FOMO is undeniably an aspect of cryptocurrency investing, Sommer's dismissal of Bitcoin as merely a gamble on the roulette with an $800 billion stake is arguably a misrepresentation. Accepting the arguments of Bitcoin enthusiasts does not require personal endorsement, but dismissing them entirely could lead to criticism and exclusion by crypto-sceptical peers.

Sommer's Recognition of Bitcoin's Underlying Technology

On a positive note, Sommer acknowledges the technological strength underlying Bitcoin, including its blockchain, decentralized peer-to-peer structure, and complex mathematical coding. He suggests that the concepts incorporated in Bitcoin and other so-called cryptocurrencies could be significant in the future.

Concluding Thoughts

While Sommer asserts that the term 'cryptocurrency' is a misnomer as they are not truly 'currencies', he also challenges the comparison between Bitcoin and gold. Satoshi Nakamoto, the elusive inventor of Bitcoin, has previously stated, If you don't believe me or don't get it, I don't have time to try to convince you, sorry. This sentiment resonates today, as many continue to dismiss or challenge the validity of Bitcoin and other cryptocurrencies.

Bitcoin's philosophical proposition and impressive economic performance are among the primary reasons behind the growing interest in Bitcoin ETFs. Despite the volatility of Bitcoin and the potential for substantial losses, 'hodling' or holding onto Bitcoin over an extended period has proven to be a profitable strategy for many.

While Sommer presents other ways to gain exposure to cryptocurrencies, such as investing in crypto-related stocks, owning an asset that cannot be seized holds a unique appeal. Regrettably, Sommer appears to be turning away from this idea prematurely and suggests that the substantial interest in Bitcoin recently demonstrated by the launch of 11 Bitcoin ETFs is merely a manifestation of FOMO. This argument, however, could also apply to skepticism. Therefore, it's essential to thoroughly consider your sources of information.

Edited by Jonathan Stoker