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Wall Street’s Fidelity Mounts Defense For Bitcoin

In a bid to promote Bitcoin as a viable asset, Fidelity published a six-pronged response to most common criticisms.

Fidelity wants the world to warm up to Bitcoin. It spent an entire blog post yesterday defending the largest cryptocurrency by market cap—a technology that many consider would one day make Fidelity, a centralized financial institution, redundant. 

Ria Bhutoria, director of research at Fidelity Digital Assets, the department at Fidelity responsible for handling cryptocurrencies, outlined a six-pronged defense for Bitcoin. 

First, she responded to the charge that Bitcoin is too volatile and is too slow and expensive to become a means of payment. ”Bitcoin’s volatility is a trade-off it makes for perfect supply inelasticity and an intervention-free market,” she argued.

As for the trouble around payments, Bhutoria argues that this is just one of the “deliberate trade-off[s]” as Bitcoin “offers core properties such as decentralization and immutability”. 

Here, Bhutoria repeats the defense from Bitcoin maximalists in 2017, who argued that Bitcoin shouldn’t optimize itself for payments at the expense of centralization. Opponents disagreed, split from Bitcoin, and formed Bitcoin Cash. In other words, Bitcoin’s weakness is...good for Bitcoin.

Next, Bhutoria defended the huge amounts of energy wasted by Bitcoin mining. She pointed to the rise of renewable energy resources and said that Bitcoin miners are using energy that would otherwise be wasted anyway, such as “stranded gas, which leverages energy that may not be consumed for other purposes and reduces carbon and methane emissions in the process”.