The Islamic Case for Bitcoin

This is an opinion editorial by Muslim Bitcoiner, the host of the Muslim Bitcoiner Podcast. This content is for informational purposes only and does not represent legal, tax, investment, financial, or other advice.

This is a companion discussion topic for the original entry at

I’m not going to discuss whether Bitcoin is halal or not. This question is for scholars to answer, but I have a question about the viability of Bitcoin as an investment. What’s the intrinsic value of Bitcoin. Warren Buffett defines intrinsic value to be: " the discounted value of the cash that can be taken out of a business during its remaining life "

So, what’s the intrinsic value of Bitcoin?

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Asalamu alaikum. I would say that the intrinsic value was the hardest hurdle for me to overcome to understand Bitcoin. There’s many way to define intrinsic value, but the definition used by Buffet doesn’t really apply because it automatically presupposes that Bitcoin is a business that yields cash flow, and it’s clear that Bitcoin is not a business, but a new form of money. So I think it’s good to explore that question from that angle.

Checkout the section called “the intrinsic value argument” in this article here:

Muslims should adopt bitcoin. Before we can understand why Muslims… | by Muslim Bitcoiner | Medium

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Alaikum assalam wa rahmatu’llahi wa bartakatuh. It’s interesting that you call “intrinsic value” a fallacy! In fact, I find comparing Bitcoin to gold to be the fallacy. There are utilities of gold. Gold can be used as jewelry. It can also be used in manufacturing. What are the actual utilities of Bitcoin? What human need does Bitcoin serve?

It’s interesting that you quote Ludwig Von Mises to establish the “value” of Bitcoin, especially the part where he says: “Means are valued derivatively according to their serviceableness in contributing to the attainment of ultimate ends.” What is the serviceableness of Bitcoin? Does it produce anything of use to human beings?

Microsoft co-founder Bill Gates said he thinks cryptocurrencies and NFTs are “100% based on greater fool theory.” ( )

I agree with him.

Warren Buffett said: ““If you … owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it,” ( )

I agree with him.

At Berkshire Hathaway’s annual meeting in 2018, Munger likened the crypto market to “trading turds .” ( )

I agree with him.

Regarding your claim that Bitcoin is a new form of money, I’d like to refer you to this article on Forbes that addresses this claim: Bitcoin Is A Cryptocurrency, But Is It Money?

Finally, personally, I think Bitcoin is a fad. Fads come and go. Fads are short-lived. I find it sad to see decent people spend years and years of their lives, working hard to save money, just to spend on this mirage. May Allah the Almighty help the bag holders.

Finally, I’d like to emphasize that I am not an expert, and I am not qualified to give financial or investing advice. Everything I write on this forum, is my mere non-expert opinion and Allah knows best.

All the best, brother.


After reading the Zoya blog and from brother @Muslim_Bitcoiner’s medium blog, I think you’re missing the mark here. Especially when compared against speculative investments like NFTs and most crypto.

After reading, I’m considering BTC as a position against fiat currency, inflation, and riba.

Rather than asking “Does this money have intrinsic value?”, you should be asking “What makes money valuable?”. And that is an excellent question!

GDP, economic strength etc.

What makes BTC valuable?

Selling to the bigger fool theory?

Honestly, the only thing that drives BTC value is people’s demand. When demand stops - when people lose interest in BTC, what would the value of BTC be?

But again. I’m not an expert. So, please don’t take any financial action based on my opinions.

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If I understand your thesis is that fiat money is poisoned thus it doesn’t matter what the end user does.

Blockchain technology is really cool. I worry that Bitcoin can be like blue ray disks.

10 posts were split to a new topic: How to Define Fair Value for BTC

Going back to the purpose of the article…the only issue I have with the Islamic case for Bitcoin is that it does feel like the price is manipulated. Which makes Bitcoin not perfect again.

Note - I’m not suggesting fiat currency is 100% halal or anything.

If we rebadged this article as the Islamic Case for Crypto, then yeah, makes sense to me.

This is a good point. @Muslim_Bitcoiner why should Muslims care for Btc but not just Crypto? What’s the difference?

So I think you’re hung up on figuring out what service or use case Bitcoin serves people.

In addition to Bitcoin, I also hold some (very tiny %) gold. Personally, I don’t hold gold to use it as jewelry some day, or for the off chance I need a fake tooth. I hold gold because I know that I can somewhat effeciently store value across time and be able to pass that value on to my kids and grandkids, insha Allah. If people stopped using gold as jewelry, I’m still holding on to my gold.

So wait, why do I even value gold in the first place if I’m not going to “use” it? Well, I know gold has historically kept its value throughout history. OK, but where does that value come from? Well there’s nothing “intrinsic” that gives a yellow rock value. But gold does have certain monetary properties that makes it a good money, namely scarcity, divisibility, durability, portability, fungibility, and others I can’t remember now. But as long as gold has these properties, people will continue to see gold as valuable. What if gold wasn’t scarce anymore and everyone woke up with 100 kg of gold in their home tomorrow? Gold wouldn’t be worth as much. And nothing intrinsically changed about the gold molecule to now have a different value in our example. That’s why (I think) it’s important to understand that value is subjective, not intrinsic.

So does Bitcoin possess any of these properties? I’ll let this article ( The Bullish Case for Bitcoin. UPDATE: First published as a long-form… | by Vijay Boyapati | Medium) answer that question.

OK, but that still leaves the question, what service is this Bitcoin thing serving to people?? Well different people value and use bitcoin in different ways. True, some attempt to make short term fiat gains. For example, for myself, I need a truly Riba free way to transport value efficiently and SECURELY across time and space. I know that’s not the answer you wanted to hear, because (maybe) eventually I’ll exchange this Bitcoin for supposedly something tangible if I don’t pass it on to my kids. But being able to transport value across time and space in a truly Riba free way is the service that Bitcoin provides to me. I’ve yet to find any commodity or security that can provide me this service in a better way.

I apologize for the long response, and I will read those articles that you’ve listed!

Bitcoin is an open internet protocol, so if anything, it is like TCP/IP or SMTP which have been around for decades. Bitcoin keeps cementing itself as the default open monetary protocol of the internet, nothing else comes close.

Gates, Buffet, and Munger are fiat cantillionaire insiders. Bitcoin is anti-fiat.

You wouldn’t go to a taxi company to ask them about Uber and expect an unbiased response.

Concerning the manipulation of price, the price goes up and down based on people buying and selling. Now keep in mind, there’s a strict issuance schedule of btc entering the market, and the supply is capped at 21 million. So as the demand for btc fluctuates, the supply of btc does not change. Combine that with the fed and banks excessively “printing” money, which distorts the economy and leads to the misallocation of capital. Of course the price (in terms of $) is going to swing widely. Bitcoin is a very new thing, and people are still trying to figure out the “true” price of this thing. Price discovery is a process of people buying and selling. So people can “manipulate” the price, but it’s only through people freely buying and selling, not by printing a bunch of btc out of thin air. That’s the key difference between fiat and btc.

As for other cryptos, I think they’re a waste of time. They’re all centralized with a business or CEO running it, which actually makes it a security, not a currency or money. The monetary policy of these cryptos (including Ethereum) changes all the time. They’re also not as secure and decentralized as bitcoin. In short, there are technical, economic, and ethical problems with all altcoins.

“Whales” can manipulate the price of Bitcoin by suddenly selling some of their funds, artificially dropping the price. Then buying when peoples’ stop losses are triggered. The price action feels like that is what is happening, and I’ve heard crypto enthusiasts themselves talk about it a lot.

Like I say, it does appear to allow price manipulation precisely because it’s possible for a few people to own a high % of the BTC in circulation. This is an issue with it. Effectively it makes it similar to being centralised, just centralised by different, unelected people.

Note that I did say that I’m not saying fiat is perfect - far from it. Rather, BTC is not perfect there are issues with it like this one.

So, you’re trying to convince me that a bunch of computer codes is worth 24k?!

Comparing Bitcoin to gold is a fallacy. Humanity considered gold precious for 12000 years.

Demand for Bitcoin has been significant for only around 10 years.

Can’t you see the difference?

12000 years vs. 10 years!

What will happen to your wealth when people lose interest in Bitcoin?

Do you think people will be interested in Bitcoin forever?

Having said that, please don’t take any financial or investing decision based on what I write on this forum, because I am not an expert and am not a financial/investing advisor.

Allah knows best.

Are you serious?

If they see real value in Bitcoin, can’t they convert their fiat wealth to Bitcoin?!

Besides, the biggest part of their wealth isn’t in fiat money. It’s in real assets (stocks and real estate).

regarding islam only thing that matters is purpose and utility
of you read the btc papers by Satoshi its totally evident fiat based system is highly manipulted and controlled by few centralized organizations. only they have the right to determine the future of it and you can see the disparity it created in the society so Satoshi proposed open market system and giving everyone access to decide its future, true democracy. So totally halal purpose, right?
Secondly, its a great payment system just one click and payment sent across the borders no centralized authority to stop just one click and make a swap on any exchange do we even need banks after this!
launch your project on Blockchain or like philanthropic organizations are funding open science and other needy and keep track if the money reaches the right person.

Empire strikes back but they do have a good point

There are scholars (Imran Hosein) for example who aren’t big fans of Bitcoin or cryptocurrency.

In my opinion, literally anything can be a medium of exchange, and anything is better than transacting in the fiat monetary system we live in. In the event that fiat money fails, or we find our currencies useless, Bitcoin can be the alternative means of transacting.

I personally have crypto and I have positions in $BTCC.B (Bitcoin ETF) - and due to institutional adoption of Bitcoin, it acts more like a 24/7 VIX. Jim Bianco talks about the correlation between the VIX and Bitcoin a lot