The crypto world is rife with misinformation. It’s a problem that stems from a number of enabling factors, like lack of regulation and hard-to-grasp technical concepts. One of the most popular myths about crypto is that it’s nothing but a tool for crime. The idea does have some truth to it, sure. But the rhetoric is often wielded to stoke fear rather than to promote conversation around making the market safer. A take on Bitcoin (BTC-USD) by Fox News’ Tucker Carlson is the newest example of this, showing how media contorts the public’s perception of crypto.
Earlier this week, on his program Tucker Carlson Tonight, Carlson laid out a theory linking Bitcoin to the recent failures of the airline industry. In recent weeks, airline struggles have become a spotlighted story. Recently, the Federal Aviation Administration (FAA) ordered a ground stop on all flights in the United States. The stoppage affected thousands of flights and led to great concern over its cause, prompting an investigation by the Department of Transportation (DOT).
So far, this investigation has suggested that a corrupt file caused a pilot communication system to go down. But as the investigation continues, Carlson is saying the stoppage is the result of hackers. He claims a shadow group of ransomware hackers held down the crucial piloting system. Carlson draws attention to the increase in Bitcoin prices back above $21,000, occurring just as the stoppage ended. He posits that these gains are the result of the U.S. government buying Bitcoin to pay a ransom.
Tucker Carlson’s Crypto Claim Is Baseless Fear-Mongering
Tucker Carlson maintains without a shadow of a doubt that his theory holds water. However, the only evidence Carlson provides to support his claim is a Bitcoin price chart. In a segment, Carlson drew attention to the 20% increase in Bitcoin prices since the ground stoppage, positing, “Is that a coincidence?”
Yes, it is.
Maybe Tucker Carlson has never been to a DMV before to get his license renewed. Otherwise, he would likely know the DOT is not some hyper-efficient and infallible government agency. Rather, it’s just an office with normal people working in it, meaning things just go wrong sometimes. A more likely but boring reason behind this corrupt file is simply user error or a technical failure.
Carlson is using a spurious correlation to sell his viewers on this theory. A spurious correlation draws a connection between two different events where one does not exist. Carlson, noticing an overlap between the BTC uptick and the ground stoppage, is connecting the two unrelated events in order to sell this claim. Such framing is made to appear more legitimate with vague statements like “almost all ransoms like this are paid in Bitcoin,” which recalls the Colonial Pipeline hack of 2021.
Many crypto fans have been quick to dismiss Carlson’s theory, calling it a “tin foil” conspiracy. They doubt that the U.S. government would go buy masses of Bitcoin on the open market. Indeed, the government already owns well over 200,000 BTC — over 1% of the total supply. It would not need to buy any Bitcoin to pay a ransom, much less through retail exchanges.
Manufactured Stories of Crypto Crime Taking Spotlight Off of Institutional Misconduct
One thing that Tucker Carlson and others do get right about crypto is that there is plenty of crime in it. However, the fear-mongering being done by Carlson, as well as lawmakers like Elizabeth Warren, is distracting away from a real issue plaguing the industry.
These commentators have been railing against crypto for years, calling it the digital underbelly. Warren has time and again referred to crypto as an avenue for drug dealing, sex trafficking and terrorism. The basis on which these claims lay is not entirely false. Indeed, some criminals have been proven to use crypto to obfuscate their dirty money transactions.
As true as this may be, though, these claims are quite overblown. Crypto critics assert that crime is the main use case for crypto. However, cybersecurity firms have found that only $10 billion to $20 billion dollars worth of the market’s total volume is actually used for crime. That’s a sizable number at first glance, but only a minute fraction of the market’s total volume.
These critics continue to overstate the role of ransom groups and drug dealers in the total crypto transaction volume. Meanwhile, they are distracting from a very real group of criminals that needs to be addresses. The FTX meltdown demonstrates the more immediate threat to U.S. investors by way of the entrepreneurs running crypto companies. Without strict regulation of these companies, they are able to do literally anything they want behind the scenes. To Elizabeth Warren’s credit, the senator has pushed legislation which could bring these companies under the purview of the Bank Secrecy Act. That could prevent this trend of asset mismanagement in the future.
Tucker Carlson’s take on crypto is not just full of holes. His characterization of crypto as a tool for criminals to extort the U.S. government is overblown. And it’s a detriment to more widespread adoption of the technology. Moreover, it misdirects the most basic regulatory needs that the industry faces if it is to immediately protect American investors.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
