Fidelity's Crypto Arm Responds to 6 Common Bitcoin Criticisms

Fidelity Digital Assets has responded to some of bitcoin's most frequent criticisms citing heightened interest in the cryptocurrency.

AccessTimeIconNov 16, 2020 at 9:47 a.m. UTC
Updated May 9, 2023 at 3:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Fidelity Digital Assets, a subsidiary of Fidelity Investments, has responded to some of bitcoin's most frequent criticisms, suggesting clarity is needed amid heightened interest in the cryptocurrency.

In a blog post on Thursday, Director of Research Ria Bhutoria said she was addressing persistent "criticisms and misconceptions" about the cryptocurrency. These include whether bitcoin is too volatile to be a store of value, has failed as a means of payment and is environmentally wasteful.

  • 'The Voice' Makes Its Way to the Metaverse
    'The Voice' Makes Its Way to the Metaverse
  • Staking Has Been a Major Liquidity Sink for ETH: Coinbase Institutional
    Staking Has Been a Major Liquidity Sink for ETH: Coinbase Institutional
  • Fantom Token Jumps; Dolce & Gabbana Sued for NFT Deliveries
    Fantom Token Jumps; Dolce & Gabbana Sued for NFT Deliveries
  • What's the Key to Winning a Hackathon?
    What's the Key to Winning a Hackathon?
  • "Bitcoin’s volatility is a trade-off [that] makes for perfect supply inelasticity and an intervention-free market," she said, but with greater adoption and introduction of derivatives and investment products, volatility may continue to drop.

    According to the Bhutoria, the world's first cryptocurrency's "core" use case isn't in payments. However, it uses its limited capacity for settling transactions that aren’t well-served by traditional rails, and offers "high settlement assurances."

    "Limited throughput is the trade-off bitcoin makes for decentralization, which is a direct result of cheap and easy validation," she wrote.

    The post responds to bitcoin's reputation for sucking up vast amounts of energy in the mining process, arguing a "substantial portion" of its power consumption comes from renewable sources. Further, the energy it does expend is a "valid and important" use.

    "Bitcoin transactions connected to illicit activity are very low," Bhutoria went on, addressing a common criticism of cryptocurrencies in general. Like cash, bitcoin is "neutral and has properties that may be valuable to good actors and bad actors," she said.

    As for the argument that bitcoin isn't backed by anything, such as real-world assets, it is in fact "backed by code and the consensus that exists among its key stakeholders" was Bhutoria's response.

    Bitcoin is growing because people recognize it offers "perfect scarcity ... transaction irreversibility, and seizure and censorship resistance," she said.

    Finally, on the threat that a competitor might someday replace bitcoin, she argued that while alternatives have tried to improve upon bitcoin’s "limitations" (such as limited transaction throughput and volatility), "it has been at the cost of the core properties that make bitcoin valuable."


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.