• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Technology Bitcoin

Counter-Trading The FUD — Bitcoin Countertrade of the Last Decade

Like 0

By Ryan Dinse, Monday, 17 May 2021

FUD attacks hurt the Bitcoin [BTC] price in the short term. The BTC price is notoriously volatile and it’s hard for the average investor to make good decisions in the heat of the moment...

In today’s Money Morning…the hardest of money…the sad truth? Musk has his snout firmly in the fiat trough…context is everything…and more…

I’ve been in bitcoin since late 2013 and over that eight-year time period I’ve seen every kind of attack come and go.

‘China controls it.’

‘Governments will ban it.’

‘Quantum computers will destroy it.’

‘It has no intrinsic value.’

‘It’s too slow and expensive.’

And many more besides…

In the crypto world, we refer to these arguments as FUD.

It stands for ‘fear, uncertainty and doubt’, and it is used to try and keep ordinary people away from bitcoin.

Each time a new piece of FUD takes hold, the mainstream media jumps on it to say this is the end of bitcoin.

In fact, bitcoin has been declared ‘dead’ over 400-plus times since 2010 as this site here tracks.

But bitcoin is very much alive and it will be for a long time to come.

In fact, countertrading the FUD has been the best trade of the decade…

The hardest of money

There’s no doubt FUD attacks hurt the Bitcoin [BTC] price in the short term.

The BTC price is notoriously volatile and it’s hard for the average investor to make good decisions in the heat of the moment.

Many buy in when it shoots higher, and sell when it plummets lower.

And yet, if you zoom out a bit, you can see that bitcoin always comes out more resilient:


Block Chain Market Price

Source: Blockchain.com

[Click to open in a new window]

Over time, you can see how the last cycle’s ‘boom and bust’ ends up as a mere blip.

I personally had to endure a two-year bear market between 2014 and 2016 with an 80%-plus fall in BTC’s value before seeing any gains on my initial stake.

You can hardly see that ‘scary time’ on the chart now!

The fact is, despite the odds being heavily stacked against it — an entire system of grifters, middlemen and leaners who are gaming the system of money in their favour — bitcoin is now a serious alternative.

And in turn, a threat to the fiat gravy train.

Which brings me to the latest round of FUD…

The sad truth? Musk has his snout firmly in the fiat trough

Tesla Founder Elon Musk made a big song and dance about investing in bitcoin earlier this year. Even saying you could now buy a Tesla with bitcoin.

But he shocked crypto markets last week by reversing this position, declaring:


Elon Musk

Source: Twitter @ElonMusk

[Click to open in a new window]

Are we really to believe Elon Musk invested almost US$2 billion into bitcoin without understanding the Proof of Work (POW) system that is the lynchpin that secures the network?

The only possible answers here are:

  1. He’s incredibly incompetent
  2. He’s being completely disingenuous

I’m opting for option two and this is why:

You see, just the day before the Musk backflip, it was reported on Reuters that Tesla was trying to get approved for a new US government renewable fuel credit scheme.

They wrote:

‘Tesla Inc (TSLA.O) is seeking to enter the multi-billion-dollar U.S. renewable credit market, hoping to profit from the Biden administration’s march toward new zero-emission goals, two sources familiar with the matter said.

‘The electric car maker is one of at least eight companies with a pending application at the Environmental Protection Agency tied to power generation and renewable credits, the sources said. The EPA produces a list of pending applications with some details, but not companies’ names.’

Some deeper digging revealed that Tesla was pretty desperate to get accepted into the new scheme after an old scheme that mandated petrol powered car companies like Chrysler buying Renewable Energy Credits (REC’s) from Tesla was likely coming to an end.

Tesla made US$1.58 billion selling these REC’s last year. A lot more than it made from selling cars!

And even when it comes to CO2 emissions, the hypocrisy of Musk is staggering.

As Coin Metrics founder Nic Carter noted in a tweet:


Nic Carter

Source: Twitter @nic_carter

[Click to open in a new window]

Of course, Musk has no problem selling Tesla’s to coal hungry China.

Anyway, in my opinion, Musk’s change of heart is purely driven by self-interest. An attempt to get his hands on the gravy train of free government dollars.

It’s sad really…

But that seems to be the way of things right now for an awful lot of companies. The begging bowl comes out every time they are in trouble.

So much for free markets and capitalism, eh?

But let me finish off with the central point behind the FUD.

Is bitcoin bad for the environment?

Context is everything

Yes, the process of securing the bitcoin network relies on electricity.

But that in itself doesn’t make it bad for the environment.

The people that say this are usually the ones who don’t see any point in bitcoin at all. In their minds, any amount of CO2 emissions spent on BTC is therefore ‘bad’!

If you think the fiat system of money is working well, if you think centralised control of money where government money printing dictates winner and losers, if business becomes a game of how close you are to the fiat-laying golden goose…then fine, BTC has no value.

But if you think a decentralised system of money, free from government control, a system that allows open and permissionless transactions in a free market, is a noble cause; then bitcoin is the best chance of that we have.

Or as MicroStrategy founder Michael Saylor put it:


Michael Saylor

Source: Twitter @michael_saylor

[Click to open in a new window]

But let’s put bitcoin’s energy use in context too.

Check out this chart:


Current Annual CO2 Emissions Globally

Source: Hashoverdive

[Click to open in a new window]

More electricity is actually used on clothes dryers in our homes than on bitcoin. Ban the dryers!

Then there’s the fact that an awful lot of energy used in the BTC mining process comes from renewables.

You can never know this for sure, but some studies have suggested bitcoin mining uses close to 75% renewable energy.

And this figure is only likely to increase.

You see, the process of bitcoin mining actually lends itself to harnessing the power of renewables in remote locations that wouldn’t otherwise be economic.

Think Iceland, Siberia, or even the Aussie outback.

As Tillman Korb, head of Genesis Mining, a bitcoin mining company, told EuroNews:

‘Cryptocurrency mining can also help electricity grids operate more efficiently and increase their use of renewables, Korb adds.

‘He believes that renewables are the natural future for cryptocurrencies. As Bitcoin’s value increases and the rewards for mining it decrease (a feature that is built into the cryptocurrency as more coins are “discovered”) electricity costs have to go down.

‘“There is more pressure on the cost side, for the miners and for that reason, only renewables can be the power source,” Korb says.

‘“If you just look at the incentives, it doesn’t make too much sense to use coal.”’

Then there’s this knock-out blow…

Let’s compare bitcoin to competing monetary systems too, shall we?


Danheld

Source: Twitter @danheld

[Click to open in a new window]

As it stands, bitcoin consumes less energy than gold mining (with a lot less environmental and political consequences) and far less than the current banking system with its army of ticket clipping middlemen.

Look, I’m certainly not saying bitcoin is a green solution.

But what I can confidently say is the people spreading FUD around about it, don’t have the first clue about how any of this works.

That’s how FUD works.

It’s an emotional argument designed to manipulate.

And as I explained at the start, historically, listening to such misinformed (and I’d argue manipulative) FUD has been a very bad move for investors.

Bitcoin’s transparent system makes it an easy target for simplified arguments, that don’t stand up to scrutiny.

If you actually want to look at some further facts on the ‘green’ matter, this page here is a great place to start.

Some of this is complex, some of this is transitory, and some of it is real issues to be fixed as bitcoin evolves.

There’s nuance to all this.

But just remember the promise of Bitcoin: To remove the power of centralised power over money.

If you don’t get the importance of that first, then none of this will ever matter to you…

Good investing,

Ryan Dinse Signature

Ryan Dinse,
Editor, Money Morning

PS: Bitcoin vs Gold — Expert reveals how these assets stack up against each other as investments in 2021. Click here to learn more.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments
Ryan Dinse

Ryan is a former financial advisor who over seven years helped more than 600 clients and had more than $150 million under management. This experience taught him that the mainstream investment industry has no interest in helping clients strive for greatness. He was told to make ‘safe’ investment plays and settle for average returns. It wasn’t good enough for Ryan.

In 2016, he embarked on a renewed mission: to help ordinary people lock onto extraordinary trends before they go mainstream. He’s an experienced small-cap trader and an expert in cryptocurrencies. He first bought Bitcoin [BTC] in 2013, when it was around US$600.

His crypto advisory is a must for anyone looking to make digital assets a part of their long-term portfolio. Check it out here. His tech advisory Alpha Tech Trader aims to identify and latch onto strong emerging opportunities in the tech sector, wherever they are in the world. Get more info here.

Ryan’s Premium Subscriptions

Latest Articles

  • Don’t Get Swept Up By the Herd: Bulls & Bears in an Age of Social Media
    By Charlie Ormond

    Markets have always reflected this chaotic behaviour, but today’s markets operate in an environment fundamentally transformed by social media.

  • The latest Closing Bell is available now
    By Callum Newman

    Tune in today to watch the latest Closing Bell podcast with Murray Dawes. We discuss gold, oil, real estate…plus a stock to watch. Tune in now!

  • Thorium: One Step Closer to China’s Energy Fortress
    By James Cooper

    Forget AI, the biggest breakthrough of this century will revolve around ENERGY. And the commercialisation of Thorium reactors could be at the heart. Read on to find out why China could be about to make history.

Primary Sidebar

Latest Articles

  • Don’t Get Swept Up By the Herd: Bulls & Bears in an Age of Social Media
  • The latest Closing Bell is available now
  • Thorium: One Step Closer to China’s Energy Fortress
  • The famous yield curve: buy or sell signal? You decide…
  • How Australians voted for a great wealth redistribution

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988