Note that this is not the first time Elizabeth Warren has criticised Bitcoin. Previously, the senator called the cryptocurrency “encouraging a shadow economy” that on top of that has no concern for consumer protection and financial stability. Read more about these ridiculous arguments in a separate piece.

What cryptocurrencies are criticised for

Warren and Smith claimed a lack of stability in the price of Bitcoin, and asked how Fidelity was going to deal with the “significant risks like fraud, theft and loss” that the cryptocurrency market allegedly carries with it. Here’s a rejoinder from the politicians, in which they share their view of the situation. Decrypt quotes.

Investing in cryptocurrencies is a risky and speculative game, and we are concerned that Fidelity will risk the retirement savings of millions of Americans.


Note that such a statement sounds like manipulation. Still, those who want to invest in Bitcoin are probably aware of its ability to both lose value and appreciate significantly over long periods of time. In addition, everyone should decide for themselves what to do with their earnings, which makes the politicians' comment sound too one-sided.


Senator Elizabeth Warren

The officials are members of Senate committees that, among other things, oversee issues related to pensions. Warren, for example, sits on the special committee on ageing, while Smith serves on the Senate committee on health, education, labour and pensions.

In addition, both have stated that “Bitcoin’s volatility is compounded by the fact that it is subject to the whims of just a few influential individuals”. By these “influencers” Warren and Smith meant Tesla CEO Ilon Musk, whose “tweets alone have caused Bitcoin’s value to fluctuate by up to 8 per cent”.

Is Ilon Musk that important in the cryptosphere? The billionaire does attract a lot of attention, and his public statements have noticeably influenced the price of not only Bitcoin, but many altcoins as well. However, Musk has nothing to do with the functioning of the blockchain of the main cryptocurrency and has no way of influencing its fundamentals. Nor can others, however powerful, because Bitcoin’s decentralisation leaves no chance for censorship or prohibition.

In addition, as the hype around Dogecoin faded in the spring of 2021, Musk's tweets have all but ceased to have any impact on the coin. Moreover, his statements regarding DOGE also do little to move the crypto-asset's exchange rate - or at least only do so for a short period of time.

Elon Musk and Dogecoin

In a statement to the media, Fidelity officials responded to officials with an official letter. Here’s a quote from it.

We look forward to continuing our respectful dialogue with policymakers to responsibly provide access to all relevant consumer protections and educational guidance for pension plan sponsors as they consider offering this innovative product. In line with our ongoing dialogue with regulators and policy makers, we will respond directly later.

Bitcoin monthly chart

Note that Warren has previously criticised Bitcoin because of the excessive electricity consumption by its miners. In this regard, there has recently been an active discussion around Bitcoin itself about the prospect of its potential transition to Proof-of-Stake. This is a more energy-efficient coin mining algorithm, the idea of BTC switching to which was previously proposed by Ripple co-founder Chris Larsen.

The proposal sparked a wave of discontent in the cryptocurrency community. However, it’s not just the criticism that will prevent a potential BTC transition to PoS, Sazmining CEO William Samoshegi believes. Here’s his quote, cited by Cointelegraph.

The fundamental error of Greenpeace, Larsen and other critics of Bitcoin’s energy consumption is that they evaluate a cryptocurrency by its “ingredients” rather than by the value it has to offer. We should evaluate a new invention by the extent to which it solves a problem in society. The current Proof-of-Work algorithm can create reliable money and a decentralised currency backed by real energy. PoS cannot achieve the same result.

Note that criticism of PoS as a consensus algorithm sounds far-fetched. After all, many modern cryptocurrencies like Solana, Avalanche and Azero operate successfully based on Proof-of-Stake, so criticizing this algorithm just because Bitcoin doesn't run on it is silly at the very least.

Cryptocurrency investor


Over time, we believe that such arguments by prominent officials will become less and less noticeable to the general public. Obviously, the benefits of decentralised assets are not outweighed by volatility alone, i.e. changes in their exchange rates. In addition, with the current inflation rate, it is ridiculous to criticize any assets for lack of stability.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we also talk about other interesting topics that affect the markets.