FT Features Triple Bitcoin Critique as Market Faces Pullback
Bitcoin’s recent 35% decline has sparked a surge of critical coverage, with the Financial Times (FT) running three prominent articles on its website Wednesday. The U.K.-based publication has long been skeptical of cryptocurrencies, and its coverage this week underscored that perspective.
The first piece, “The fatal flaw in using bitcoin as a currency,” claimed bitcoin experienced an effective 900% annualized inflation rate during its downturn. The article argued that bitcoin’s fixed supply cannot contract when demand falls, unlike fiat currencies, which central banks can adjust to manage inflation. The FT presented this inelasticity as a fundamental obstacle to bitcoin’s use as a currency.
The second article, “Infinite money glitch, meet arithmetic,” focused on Strategy (MSTR) and its model of issuing shares or debt to acquire bitcoin. The report suggested this approach is now vulnerable, as spot bitcoin ETFs have removed any premium for MSTR stock, potentially leading to forced bitcoin sales. While crypto analysts note that the so-called “death spiral” is likely overstated, the FT framed it as a cautionary tale of arithmetic colliding with market reality.
The third article, “Crypto hoarders dump tokens as shares tumble,” extended the critique to other digital treasury companies following similar strategies. Many are now trading below the market value of their crypto holdings and selling tokens to fund buybacks or service debt. The FT warned that most could face severe setbacks. Some bitcoin advocates, however, view this as a potential boon, allowing capital to flow directly into bitcoin rather than into management teams and boards.
The timing of FT’s coverage is ironic: bitcoin remains up over 350% in the past five years, even as the U.K. government proposes further tax increases.
Satoshi Nakamoto famously embedded the line “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” in bitcoin’s genesis block. If written today, it might read: “Chancellor on brink of £26B in new taxes.”
