Bitcoiners are seething at Peter Zeihan’s interview on Joe Rogan podcast
Several Bitcoin advocates have criticized geopolitical analyst Zeihan for lacking knowledge of BTC, and refuted his claims.
American geopolitical analyst Peter Zeihan has never been popular among Bitcoiners. Zeihan has spoken out against Bitcoin (BTC) several times in the past, going as far as to call BTC a “dumpster fire.”
In the nearly 2 hours-long podcast hosted by Joe Rogan on Jan 8, Zeihan went on to reiterate his views against the largest cryptocurrency by market capitalization. In the less than two minutes Zeihan spent on discussing Bitcoin, he said BTC has no “intrinsic value.” This is a popular narrative presented by many Bitcoin and crypto critics, including the central bank of India.
Zeihan went on to say that the fall in BTC prices is just the asset “starting to be priced appropriately.” He added a darker prediction that the Bitcoin price is set to become negative. He said:
“What’s Bitcoin at, $16,000? It has another $17,000 to go down.”
Zeihan said that Bitcoin became an ideology and when people invest based on an ideology, they make decisions that are “a little divorced from math.”
This is because Bitcoin proponents claim BTC is the “currency of the future and decentralized ledger is the way to go,” Zeihan said. He added that BTC proponents also claim that any government-controlled currency is inherently “negative”
But, “that’s just not how currency works,” Zeihan said. He went on to define currency as a store of value and a method of exchange that requires “trust.” Therefore, a centralized authority is required to control the volume of such a currency, he explained.
Because the supply of BTC is capped at 21 million coins, Zeihan claimed that “by default, that means it cannot be used for trade.”
He argued that the “whole idea of economic activity is that there is expansion.” This means that more and more currency is required to “lubricate and manage that expansion,” he claimed, adding:
“If a currency is locked into a specific number, you get monetary inflation, and that is one of the fastest ways to destroy an economic model.”
Zeihan then contradicted his previous prediction of BTC price going negative. When Rogan asked to clarify that because the supply of BTC is capped, “the only thing that can happen is Bitcoin becomes more expensive,” Zeihan replied, “right!”
And the model of people holding BTC over long periods “while everyone else suffers,” is “not viable,” Zeihan claimed.
The alternative, Zeihan said, is that if a private individual generates money at whim, which is no different than the current centralized models, except for the lack of accountability.
Twitter erupts against Zeihan
Alex Stanczyk, managing director of BTC accumulation platform Swan Bitcoin, criticized Zeihan for his “ignorance.” He wrote:
“I am not sure it is humanly possible for a person to pack more ignorance into 1min55seconds. Almost every single thing this “expert” said in this short span of time is complete nonsense.”
Jeff Ross, who runs the hedge fund Vailshire Capital, pointed out “critical errors” in Zeihan’s arguments. He noted that Zeihan’s logic, which dictates that money needs to be centralized to be valid, that scarce money limits human productivity and economic expansion, as well as that BTC and crypto are interchangeable, are all wrong.
Joe Burnett, head analyst at BTC mining solutions firm Blockware, caught on to Zeihan’s contradiction when the geopolitical analyst agreed that BTC is only going to become more expensive. He remarked:
“Peter is accidentally one of the largest Bitcoin bulls!“
Bitcoin maximalist Jesse Myers also wrote an article countering most of Zeihan’s arguments. In his article, Myers explained that Zeihan “has his terminology backwards” when he said “monetary inflation.”
An inflationary currency is one where buyers have to spend more units to buy fewer goods over time, like the U.S. dollar, Myers argued. Bitcoin is a “deflationary currency” since as its value would increase, it would enable people to buy more goods with fewer units, he added.
“Not only is Bitcoin excellent at what is actually the primary function of a currency (being a good savings vehicle), but it also doesn’t matter for transactional purposes that Bitcoin gets more expensive over time….there’s no such thing as a currency being “too expensive to use” as Zeihan suggests.”
Myers pointed towards gold as a deflationary asset that was used in the U.S. before the federal bank was created in 1913. During the 150 year-period that gold was used as currency, federal the American economy faced deflation as prices shrank over time. This, Myers argued, drove innovation and excellence.
In contrast, since the U.S. dollar was adopted, the poor and middle class have had their wealth eroded, Myers wrote. This, Myers said, testifies to the fact that deflationary currencies are better than inflationary counterparts, contrary to Zeihan’s claims.