Bitcoin Has No Intrinsic Value

When Marks refers to “intrinsic value,” he means something specific, something borrowed from traditional equity analysis: the value of an asset derived from its future cash flows, discounted to the present. By that standard, a company with strong earnings has intrinsic value. A startup burning cash does not. The framework is rigorous, well-tested, and entirely appropriate for productive assets.

Bitcoin is not a productive asset. Neither is gold. Neither is the dollar in your wallet.

ARK Investment Management made this point in institutional analyst research published in 2020: “Equity values are determined by discounting expected cash flows. A monetary asset like bitcoin, however, is nonproductive, its appreciation based on how effectively it preserves or enhances value over time.” ARK Research, 2020 The intrinsic value critique applies the right tool to the wrong category. It is not that Bitcoin fails the test. It is that the test was never designed for money.

This distinction matters because the same critique, applied consistently, would dismiss gold, government bonds, and every fiat currency on earth. Critics who call Bitcoin valueless are, in almost every case, living their financial lives in assets that fail identical scrutiny. The question is not whether Bitcoin has intrinsic value by the narrowest possible definition. The question is whether that definition is a coherent standard, applied honestly, to anything at all.

It is not. And that is where the argument begins to break down.

Wired magazine put it plainly in 2017, at a time when Bitcoin was still widely dismissed: “Almost nothing in the world of trading and money has intrinsic value. Money has only the value that is ascribed to it over time.” The same piece turned to gold, which critics often cite as the standard Bitcoin fails to meet: “Gold itself has no intrinsic value. Its supply is limited, creating a relationship between supply and demand that cannot easily be manipulated. But gold itself has no value per se other than that ascribed to it by humans over time.” Wired, 2017

This is not a new problem, and Bitcoin is not the first monetary asset to face it. In the late 19th century, William Jennings Bryan crusaded against the erosion of purchasing power caused by gold-backed paper money, arguing that paper currency was “ephemeral and detached from value that could be easily recognized.” His opponents made nearly identical arguments against his preferred alternative. You could replace the words “paper money” with “bitcoin” in most of those 19th-century debates and be hard-pressed to tell them apart. Each generation encounters a new form of money and applies the same objection: this thing is not real, it has no substance, it will not last.

The form of money is not arbitrary. History selects for specific properties: scarcity, durability, verifiability, portability, divisibility, and resistance to manipulation. Gold earned its monetary reputation over thousands of years by possessing most of these. Paper money supplemented it by solving the portability problem, at the cost of introducing inflation risk. Bitcoin was designed from the beginning to possess all of them, and to solve the problems neither gold nor paper money could ever fully resolve. Understanding what the Bitcoin Standard means and why those properties matter now more than ever is the next layer of this argument.

The first is thermodynamic. Bitcoin’s Proof-of-Work mechanism requires miners to expend real-world energy to add transactions to the ledger. This is not a design flaw. It is the security model. Every block added to the chain represents an irreversible expenditure of electricity and computing power. To rewrite a transaction buried ten blocks deep, an attacker would need to redo the proof-of-work for all ten blocks simultaneously, while the rest of the network continues adding new ones. The energy is not wasted. It is converted into the mathematical certainty that the ledger cannot be silently altered.

Adam Livingston, writing in The Bitcoin Age, puts it this way: “Energy is not wasted in Bitcoin. It is converted into trust, security, and decentralization.” Satoshi Nakamoto made the same point in 2010, on the forum where Bitcoin was first discussed: “The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.” Bitcoin is the first monetary system in history that ties its integrity to physics rather than to institutional promise. The security is not a claim. It is a cost, paid continuously, in the real world.

The second is mathematical. Bitcoin’s total supply is capped at 21 million coins, hard-coded into the protocol and enforced by every node on the network. No miner, government, central bank, or committee can increase that number. Every participant can independently verify the current supply at any time, at no cost, using nothing more than a computer and an internet connection. Livingston describes the supply cap as “hardwired into the very DNA of the system.” Gold grows by approximately 1.8 percent per year through mining, and the total amount remaining underground is unknown. Bitcoin’s terminal supply is provable. Gold’s future supply remains uncertain.

None of these properties require belief in a particular price level. They exist independent of what Bitcoin trades for today. The ledger is secure whether Bitcoin is worth $1 or $100,000. The supply cap is enforced whether markets are up or down. The permissionless transfer works at any price. These are engineering properties, not speculative ones. And engineering properties that solve real problems are, by any coherent definition of the word, value.

The more instructive data, however, comes not from the developed world but from the places where the need is sharpest.

According to the 2022 Chainalysis Global Crypto Adoption Index, cryptocurrency adoption is highest not in the United States or Western Europe but in countries with the most persistent monetary instability: Thailand at 20 percent of the population, Nigeria and the Philippines at 19 percent each, and Argentina and Indonesia at 16 to 18 percent. These are not venture capitalists speculating on a technology trend. These are people in countries where the local currency has lost purchasing power for years, where bank accounts are inaccessible to large portions of the population, and where sending money across borders means paying 5 to 7 percent of the transfer to a remittance company. The World Bank estimated that in 2023, $669 billion in remittances flowed to low and middle income countries. That is $669 billion moving through a system designed to extract a fee at every step.

Bitcoin solves a different and harder problem for a person in Argentina or Nigeria than it does for a person in New York. In New York, it is an investment thesis. In Buenos Aires, it is a hedge against a government that has repeatedly decimated the value of its own currency. In Lagos, it is a way to receive money from a family member abroad without surrendering a week of wages to intermediaries. Wences Casares, who built one of the earliest Bitcoin exchanges and hails from Argentina, has described the experience of watching his family’s savings destroyed by currency manipulation. That context does not make Bitcoin’s value sentimental. It makes it concrete.

The regulatory record makes the same argument from a different angle. In January 2024, the Securities and Exchange Commission approved 11 spot Bitcoin ETFs. The SEC is not a charitable institution. It exists to scrutinize whether financial products have legitimate economic substance and to protect investors from instruments with no underlying value. Approving spot ETFs, which require actual Bitcoin custody rather than futures contracts, is a formal regulatory acknowledgment that Bitcoin has sufficient economic substance to serve as the underlying asset of regulated investment products. The European Union reached a similar conclusion in 2023, when the Markets in Crypto-Assets regulation became law after three years of development. Governments do not spend three years writing legal frameworks for things they consider economically worthless.

The argument that Bitcoin has no intrinsic value rests on the assumption that markets, regulators, central banks, and hundreds of millions of ordinary people in the world’s most economically stressed countries are all making the same irrational error simultaneously. That is possible. It is also the kind of claim that requires more evidence than a definitional objection.

On April 5, 1933, President Franklin Roosevelt signed Executive Order 6102. The order required every American to surrender their gold coins, gold bullion, and gold certificates to the Federal Reserve by May 1 of that year. Compensation was fixed at $20.67 per troy ounce. Failure to comply carried a penalty of up to ten years in prison or a $10,000 fine.

Within months, the government revalued gold to $35.00 per ounce. The people who had surrendered their gold at $20.67 had no recourse. They received 59 cents on every dollar of gold’s new official price, paid in the currency of the institution that had just determined what that price would be. The industrial utility floor that gold possessed did not protect them. The government did not need gold for electronics. It needed the monetary premium, and it took it.

Gold’s physical form is its defining vulnerability. It exists somewhere. It has weight and volume. It can be located, inventoried, and compelled to move. A government that decides to confiscate physical gold has a clear mechanism for doing so, as the United States demonstrated. A more detailed comparison of gold and Bitcoin’s respective vulnerabilities is covered in Bitcoin Myths #13. The industrial floor provides a price floor under freely traded gold. It provides no protection whatsoever against a state that decides the floor is not the point.

Bitcoin does not share this vulnerability. Bitcoin held in self-custody has no physical form and no institutional custodian that can be instructed to freeze or transfer it. A government could make self-custody legally difficult. It could restrict exchanges, limit fiat on-ramps, and impose penalties. What it cannot do is issue the equivalent of Executive Order 6102 against a 12-word seed phrase memorized by its owner and replicated across a network of nodes in 181 countries. The mechanism of enforcement that worked in 1933 does not exist for Bitcoin.

Bitcoin’s “floor” is not industrial. It is functional. Anyone with an internet connection can send value anywhere in the world without a bank, a government, or an institution. That utility does not require physical custody. It cannot be seized by decree. And unlike gold’s industrial demand, which is relatively static, Bitcoin’s functional utility compounds as the network grows. Every new user, developer, and merchant that joins the network strengthens the value proposition for everyone already in it.

Schiff is right that Bitcoin lacks an industrial floor. He is wrong that this is the decisive objection. The floor he is describing did not protect the people who needed protection most, at the moment they needed it most. Bitcoin is designed for exactly that scenario.

If the standard is: does this asset solve real problems that no alternative solves as well, for people who genuinely need it, at a scale that is measurable and growing, the question becomes considerably harder to dismiss.

The people in Argentina and Nigeria and Thailand who hold Bitcoin are not doing so because they read a white paper and found the cryptography compelling. They are doing so because they have a government-issued alternative, and they have decided this is better.