FT Takes Victory Lap as Bitcoin Faces Scrutiny Amid Price Drop

After bitcoin’s recent 35% decline, the sector’s critics were quick to weigh in, and the Financial Times (FT) didn’t hold back. On Wednesday, the U.K.-based publication prominently featured three critical articles on bitcoin “above the fold” on its website, underscoring its long-standing skepticism toward the cryptocurrency.

The first piece, titled “The fatal flaw in using bitcoin as a currency,” claimed that bitcoin effectively experienced a 900% annualized inflation rate during its decline. The article argued that bitcoin cannot function as a currency because its supply is fixed and cannot contract when demand falls, unlike central bank-issued money, which can be adjusted to manage inflation. According to the FT, bitcoin’s structural inelasticity makes it fundamentally flawed as a medium of exchange.

The second story, “Infinite money glitch, meet arithmetic,” focused on Strategy (MSTR) and the limits of Michael Saylor’s model. The FT argued that the strategy of issuing shares or debt at a premium to buy bitcoin is now exposed, particularly as spot bitcoin ETFs have reduced any premium for MSTR stock. The report suggested that forced bitcoin sales could follow, though many in the crypto community note that such a “death spiral” scenario is overstated.

The third article, “Crypto hoarders dump tokens as shares tumble,” broadened the critique to other digital treasury companies following similar strategies. The FT highlighted firms now trading below the market value of their crypto holdings, which are selling tokens to fund buybacks or service debt. The report framed this as a one-way bet that could wipe out many companies. Some bitcoin bulls, however, argue that this capital rotation could ultimately benefit bitcoin itself, rather than the management teams and boards behind these start-ups.

Ironically, the FT’s “victory lap” coincided with bitcoin remaining up over 350% over the past five years, and with the U.K. government simultaneously proposing another round of higher taxes to bolster public finances.

Satoshi Nakamoto famously embedded the message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” in bitcoin’s genesis block. One wonders if today’s blockchain might bear a similarly pointed reference to £26 billion in new U.K. taxes.