Maddow Criticizes Trump and Calls Bitcoin a 'Scam' — She Misunderstood These 5 Facts

Rachel Maddow recently ran a Bitcoin FUD segment comparing BTC tokens to Beanie Babies. But literally, everything the MSNBC host says about crypto is wrong. Scholar Rhodes and freelance media commentator said during a segment airing on Thursday, March 6, that cryptocurrencies are a scam. She also criticized the White House for "playing this game."

President Donald Trump signed an executive order earlier that day establishing a national digital asset reserve fund. White House crypto tycoon David Sacks said, "The United States will not sell any Bitcoin deposited in Reserve. It will be kept as a store of value. The reserve is like a digital Fort Knox for cryptocurrency, often referred to as 'digital gold.'" "It's worth looking a little bit at this cryptocurrency," Maddow said on her show. "Just because it's a simple scam in an old-fashioned, outdated fashion. At this point, it's headed straight to the White House." Here's what Maddow had to say about Bitcoin and what she got wrong.

1. Unlike Beanies, the price of Bitcoin goes up Maddow said: "It's helpful that the main features of crypto trading aren't complicated. Like the Beanie Baby craze in the late 1990s." It was the Beanie Baby trading bubble," she explained. "Other than some emotional value if you had one as a child, Beanie Babies doesn't have a lot of inherent value." But buying a bunch of them is worth it because there is speculation that as collectibles, maybe one day your Beanie Babies collection could be of great value." However, there is one key difference between Bitcoin and Beanie Babies. While Beanie Babies debuted in 1993 at the World's Toy Fair in New York City, the toy fad reached its peak six years later in 1999. After the dot com crash of 2000, the infant auction craze never recovered to that level again. To get a realistic idea of the after-sale market value of stuffed toys, one only needs to research a local thrift store in their city. But unlike Beanie Babies, the price of Bitcoin has increased since its launch on January 3, 2009. The dollar's daily exchange rate has been growing for 16 years, outpacing the equivalent (ROI) investment returns of the strongest growth technology stocks in the entire history of the stock market. Throughout periodic bear markets, which take place on a fairly predictable 4-year cycle, critics have repeatedly called Bitcoin a fad and declared it dead. But each time skeptics are wrong when prices set a new all-time high record within four years. When it comes to the historical record, there is no logical comparison between Beanie Babies and Bitcoin. While collectible toys peaked in 1999 and never recovered, Bitcoin has created 84,000 new crypto millionaires by 2024, as reported on CNBC.
2. The Beanie Babies market is illiquid or transparent Maddow went on to say in his speech: "Cryptocurrencies work on the same idea." "They have no inherent value at all. Their only value is if you have reason to believe that someone else might want to buy them from you in the future." In practical terms, that means convincing others that your cryptocurrency is popular and in high demand — that's the key to actually making money." But it's not true to say that cryptocurrencies work on the same ideas as the toy and fashion craze or that assets like Bitcoin have no inherent value. Beanie Babies are not financial products and do not have the qualities that make them suitable for use as a financial product. It's not as easy as sending an email to exchange a truck of stuffed toys, but exchanging Bitcoin is almost as easy. It is also not feasible to track how many Beanie Babies are on the market and post the latest daily transaction data on each product. Not only is this possible with Bitcoin and other cryptocurrencies like those that are being included in the national reserve, but computer developers have designed them that way. That's part of the value they bring to the use of these digital goods as financial products and investment vehicles: liquidity and transparency.
3. Beanie Babies are not as durable and easy to replace as Crypto Meanwhile, Beanie Babies are not as durable and easy to replace as cryptocurrencies. Who wants someone else's stuffed toy that they've blown their noses on and grease Cheeto? These inventories have a market value that is very sensitive to wear and tear, and the products are so susceptible to damage that the resale price is assessed much lower than the retail price. Even when preserved in perfect condition, the post-sale value of collectible toys is the same as the market value of used cars. After being driven out of the paddock, they depreciate immediately and sharply. In contrast, the inventors of the BTC crypto asset paid careful attention to the design of their economy or "tokennomics" in order to optimize the resale value over time and in the near future. Cryptocurrencies like the two mentioned above have supply limits that lead to economic scarcity. They also do not suffer from deterioration of physical condition. In fact, any unit of Bitcoin is always equal to any other equivalent in terms of market value. This is called substitution and is a system requirement for an asset to function as a currency.
4. Beanie Babies are not as scarce as Bitcoin Maddow continued his program: "The idea of hyping up crypto is to get people to buy in early, right?" Get involved in the first place when the price is cheap because its value is about to skyrocket because so many people are interested in it. If you participate from the beginning, then you will earn a decent amount. That's the whole hype. It's the whole scam." While it is true that cryptocurrency market participants may use inauthentic, exaggerated marketing tactics, it does not mean that the underlying asset is a scam. This is not to say that there aren't smarter reasons why financial geniuses like BlackRock's Larry Fink, Shark Tank analyst Kevin O'Leary or Strategy's Michael Saylor believe that investing in Bitcoin and blockchain is not only not a scam but also the next stage of Internet and platform development human civilization.
5. Bitcoin has real demand, not just hype After making all these mistakes during her broadcast, Maddow finally completely corrected her mistakes with her closing thoughts in this segment. "Imagine Trump just announced that the U.S. government is going to buy tons of Beanie Babies," the MSNBC host said. "We will establish a federal government reserve fund with billions of Beanie Babies." What do you think will happen to the value of Beanie Babies? It turns out that there is a guaranteed big buyer for these. They're buying billions." The answer to her question is this: Their value will likely increase as most analysts expect in Bitcoin. Because there is one big guaranteed buyer and that buyer is the US government. Not bad for a scam.