Refuting the "Greater Fool" Criticism of Bitcoin

One of the most common criticisms leveled at Bitcoin is that it’s a classic example of “tulip mania” or the “greater fool theory.” The argument goes that Bitcoin supposedly lacks any utility; it only holds its price as long as someone else is willing to pay more for it—no different than a speculative bubble waiting to pop.

However, this argument fails to consider the fundamental properties of Bitcoin as a global value-transmission network. While tulip mania revolved around an ephemeral fad, Bitcoin is a global, censorship-resistant, scarce digital asset that allows near-instant and low-cost transfers. These attributes aren’t trivial fads; they are solutions to a real human need—secure value storage and transfer without relying on centralized intermediaries.

But even beyond Bitcoin, every asset—from a Cybertruck to a Picasso painting—only has a market value if future buyers demand it. It’s bizarre to single out Bitcoin for a “greater fool” criticism. Consider the Cybertruck example:

“Imagine you told your friend: ‘My Cybertruck is worth about $50,000,’ and he replied, ‘Only if there’s a greater fool willing to buy it.’
You might say, ‘First, my truck is valuable to me because I use it to drive and haul stuff. My truck is fast, powerful, bulletproof, and can drive itself. Since I find that utility worthwhile, I also expect others to value these features, so I predict the market price will reflect that utility.’”

That same logic applies to Bitcoin. It may not (yet) be as convenient as dollars when you buy groceries. But in countries with little financial infrastructure or those suffering under double-digit inflation, Bitcoin’s utility is obvious: it’s portable, secure against censorship, and impossible for a central authority to dilute with monetary printing. It offers a powerful alternative for people who must navigate a patchwork of unreliable or easily debased local currencies.

Utility & Future Demand
The real question you should ask of any asset is not, “Will someone be a bigger fool and buy this?” but rather, “Does this asset provide enough tangible (or foreseeable) utility that future buyers will want it?” Bitcoin’s intrinsic network effects, combined with its verifiably finite supply, mean that people worldwide now view it as a reliable store of value—especially for long-term savings.

Even in the United States, sitting on large amounts of cash ensures one thing: a steady erosion of purchasing power. The dollars you hold today buy less tomorrow. This global devaluation is not minor. The long-term average inflation rate of fiat currencies stands around 14%, and if the global money supply is roughly $100 trillion, that’s about $14 trillion siphoned from currency holders annually. By contrast, Bitcoin has appreciated at well over 100% per year on average since its inception. Dismissing that kind of growth as simple mania ignores the real, tangible demand for its core functionality.

Positioning for the Future
When critics say, “Bitcoin isn’t money,” they’re right—so far. Bitcoin is a rising monetary asset on the path to becoming money. It’s not (yet) the best medium of exchange, but it is an excellent vehicle for storing value over the long haul, especially in an era of rampant money printing and heightened inflation risk. Worries over the dollar’s looming devaluation and the potential default of bloated welfare systems only reinforce Bitcoin’s value proposition for savers.

No Competition on Technical Merits
Finally, no other asset competes with Bitcoin on its combination of technical merits and massive network effects. Thousands of so-called “altcoins” have tried to outdo Bitcoin, but none matches its track record, global brand recognition, or truly decentralized architecture.

Bitcoin’s security model (Proof of Work), its halving schedule (which progressively reduces new supply), and its robust open-source ecosystem are tough to replicate. Even if a new blockchain started with identical code, it would lack Bitcoin’s entrenched user base, mining network, and global liquidity. In short, Bitcoin’s “first mover advantage” has hardened into a formidable moat.

Conclusion

When critics dismiss Bitcoin as a “greater fool” investment, they ignore its core capabilities as a secure, scarce, and global store of value—attributes that have consistently driven demand. Yes, all assets ultimately depend on someone else being willing to buy them. The difference is that Bitcoin’s unique combination of scarcity, censorship resistance, and established network effects offers real-world utility—and that’s why it’s poised to remain valuable, especially as fiat currencies continue to devalue.