Bitcoin people seem pretty happy about FTX and Sam Bankman-Fried’s downfall.

The crumbling of Sam Bankman-Fried’s empire doesn’t seem to be done kicking up debris. More than 100 companies were included in the FTX bankruptcy filing, and many of them are now begging for bailouts from their peers. Even their most promising potential savior, the crypto exchange Binance, is facing increasing regulatory scrutiny. At a Senate Banking Committee hearing on Wednesday, plenty of lawmakers seemed ready to come down hard on the entire cryptocurrency sector.

Amid these travails, there’s one interested party that doesn’t seem too worried about where the digital economy will end up: Bitcoiners.

In the weeks since the bankruptcy filings of FTX, the associated hedge fund Alameda Research, and other entities, Bitcoin maxis of various stripes have tried to tilt the narrative in their favor. “FTX Pain Is Bitcoin’s Gain,” wrote early cryptocurrency investor Vincent Ventures. Personal-finance personality Robert Kiyosaki said on his podcast that he “remain[s] bullish on Bitcoin” because “it’s not bitcoin that’s the problem—it’s FTX.” High-profile tech investor Cathie Wood, who’s been losing money on her shares in publicly traded crypto companies, told CNBC that Bitcoin will continue to rise in value and even “benefit” from the FTX debacle. The CEO and founder of the company Swan Bitcoin thinks all the trouble in the crypto space this year will actually be good for Bitcoin, since it’ll clear out some of the competition. Bitcoin Magazine ran an opinion piece just days after the FTX-Alameda bankruptcy, touting its namesake currency as a means to “put the most distance between your assets and the fraud.” Even NBC News published such an op-ed, authored by a University of Mississippi economics associate professor: “Crypto has become a space dominated by get-rich-quick-schemes. Whatever this crypto industry is, most Bitcoin and Bitcoiners want no part of it.” The head of the Texas Blockchain Council gave a talk referring to the FTX fiasco as a “debt supercycle” that could be ended only by turning to Bitcoin principles. And the financial broadcaster Max Keiser tweeted that there was an explicit contrast between “the criminal enterprises of FTX” and the “thriving” of El Salvador, thanks to the Latin American nation’s use of Bitcoin as legal tender as opposed to other “scam” coins. (Some might disagree with that characterization of the Salvadoran Bitcoin experiment!)

It is not shocking that all these voices would want to manifest a Bitcoin renaissance, since that’s how most of them make money. But it does seem a bit ill-timed, considering that Bitcoin, like the rest of the crypto economy, took a hit from the FTX downfall—crashing to its lowest value in two years after clients withdrew nearly all their FTX-stored Bitcoin in a panic. Though there have been some small upswings, Bitcoin hasn’t recovered, and the asset’s correlation with the U.S. dollar has reportedly gone negative. Plenty of Bitcoin was traded through both Alameda Research and FTX, as well as on the myriad other crypto companies that had investments in, loans from, and business deals with FTX (like BlockFi, which was also forced to file for Chapter 11 in the fallout). A few days after SBF was exposed, customers of Binance, the world’s largest crypto exchange, withdrew about 15 percent of the Bitcoin they’d stored there. Other major exchanges with FTX connections and large Bitcoin holdings have lost investments, trading volume, and confidence. Winter isn’t coming; it’s already here.

Not everyone is so certain that Bitcoin’s final victory is assured. A Barron’s reporter attempted to trade Bitcoin without using a major exchange—an interface that makes the process far more layperson-friendly—and encountered some forbidding virtual mazes. Famed investor Mark Mobius, who’d anticipated the value plunge Bitcoin saw this year, predicted to CNBC earlier this month that the currency’s price could further devolve by another 40 percent next year. The analytics firm Glassnode noted a significant decline in Bitcoin transactions following FTX’s implosion. What’s more, the incredible amount of global attention paid to Bankman-Fried’s fall is also inspiring government regulators to sharpen their crypto knives. Just weeks ago, New York state became the first in the U.S. to fully ban cryptocurrency mining through “proof of work,” the energy-intensive method preferred by Bitcoiners. The European Central Bank also published a blog post with the provocative title “Bitcoin’s Last Stand.” Meanwhile, Congress is considering multiple bills that would place Bitcoin mining under federal environmental and energy regulations. Places like Quebec and Paraguay, which once welcomed Bitcoin miners, are now turning against them. Oh, and there’s a bank run at Binance.

So, who’s right? Do the maxis know something the others don’t? Are they just ignoring the warning signs as they hold on for dear life?

Interestingly, the Bitcoin cheerleading has less to do with the currency’s prospects than with a schism between competing ideologies on just what cryptocurrency should be. The well-known Bitcoin evangelist Michael Saylor recently characterized this conflict as a “boiling guerrilla war” between his side and a bunch of unethical snake-coin peddlers: As opposed to Bitcoiners, “Sam and most of the people in the crypto world were always guilty of the sin of shitcoinery.”

The roots of Bitcoin’s beef with “crypto” can be traced all the way back to Bitcoin’s much-storied 2008 founding: the release of Satoshi Nakomoto’s white paper, which specifically proposed a peer-to-peer currency-trading system that did away with middlemen like banks and payment services, used a limited-supply coin not backed by the government, and operated using a blockchain-based currency whose acceptance depended on mutual trust and faith. Nothing more, nothing less.

For a long time, this vision of Bitcoin dominated the cryptoverse, even as other enthusiasts began to brainstorm different use cases for the BTC concept. When those ideas actually gained more currency (literally), the rifts then began to show, said Paul Dylan-Ennis, a University College Dublin assistant professor who regularly teaches and writes about crypto. “Up until 2015, I could just say I was a Bitcoin or blockchain researcher. Altcoins weren’t a huge challenge yet,” he told me, referring to the low-key presence of “alternative” digital currencies, like ETH, that also employed the Bitcoin’s foundational tech. “Early on, when it was just Bitcoin, traders didn’t have to reflect too much on what their core beliefs were.”

But the rise of competition from other currencies also put alternative crypto networks, philosophies, and use cases in the public eye—and many of these did not retain Bitcoin as the core product, to maxis’ chagrin. This arrived in tandem with what became known as the “Blocksize War,” an intra-Bitcoin-community conflict that grappled for years with the struggles introduced by the Bitcoin’s increasing use and popularity. As a Bitcoin Magazine retrospective put it: “Two camps emerged: the ‘Big Blockers,’ mostly business types who supposedly wanted [for] Bitcoin to be established as a global payment system … and the ‘Small Blockers,’ mostly engineer types who saw Bitcoin as a new money network that could transform our world in the long-term, if it stayed decentralized.” On the one hand, those who wanted Bitcoin to transform into something like Bitcoin Cash; on the other, those who were mortified by such a concept.

That ideological rift, concurrent with the emergence of popular, multifaceted tokens like Ripple, dragged on for two years, reaching an existential point in 2017 where interested parties warned of an irreparable split among the Bitcoin coalition. Eventually, the Small Blockers dedicated to an immutable vision of Bitcoin won out, and the Big Blockers moved on to ambitious ventures that utilized parts of Bitcoin’s underlying tech (the blockchain, the currency trades between individual users and servers) for, well, things that were not Bitcoin: activism, autonomous communities, art, gaming. Some of these made use of initial coin offerings, or ICOs—alternatives to IPOs that raised funds by granting investors tokens issued by a given startup for exclusive use therein. That, Dylan-Ennis told me, is when the pro-Bitcoin movement took on new stakes. “Bitcoiners start to see themselves as having a more political mission—to make Bitcoin the central thing,” he said. “That’s when you start to see the distinction between ‘Bitcoin’ and ‘crypto.’ ”

What’s the actual difference? To Bitcoin evangelists, the notions that went into “crypto” were a betrayal of their favored coin’s principles. As Bitcoin Magazine put it, the Big Blockers “were never Bitcoiners or even remotely interested in what Bitcoin could do to fix the world.” Instead, they “turned out to be heavily into shitcoins, [decentralized finance], and fiat-money riches.”

In essence the view was: Bitcoin is its own thing, a democratically run treasure unimpeded by governments and the other travails that wrack global finance, while “crypto” was co-opting what Bitcoin had innovated in order to further integrate itself into the real world. And even though Bitcoin had its problems, so did crypto. Steven Lubka, a business commentator who works for Swan Bitcoin (which, as he made clear to me, “does not touch crypto”), identified a turning point in 2018’s crypto crash, which was fueled in large part through an ICO bubble. “I got into Bitcoin after losing money on ICOs,” he said. “That’s how Bitcoiners oftentimes get made: They were burned by crypto, like in 2018.”

This period of breakage and busts also occurred in tandem with another significant development: the rise of Sam Bankman-Fried as power player. He founded his now-infamous crypto hedge fund, Alameda Research, in 2017 and began planning and fundraising for his FTX exchange the year after. SBF rose to prominence during a time period that Bitcoiners frown upon: the summer of 2020, aka “DeFi Summer,” when Bitcoin crashed and “crypto” products garnered more curiosity. The COVID-19 pandemic had kept plenty of people inside, and they had fewer things to do, disposable cash (if they were still employed), and lots of crypto boosters vying for their attention. “This is when you see an acceleration in the creation of different tokens, mining, and crypto-native exotic products,” Dylan-Ennis said. Several of the startups in this space received ample venture capital investment and were even traded on the NASDAQ, tying them closer to what Bitcoiners refer to as traditional finance, or TradFi.

Funnily enough, some of DeFi Summer’s participants were uneasy about it themselves. As New York magazine noted, Caroline Ellison, the Alameda CEO and SBF confidante, called DeFi “sketchy” and “weird” in 2020, and was skeptical about her hedge fund’s seizing on an expansionary craze. Yet both Alameda and FTX both embodied and carried forward DeFi principles: The former acted as a “market maker” for new non-Bitcoin currencies to gain trading leverage backed by internal tokens, while the latter also issued its own infamous in-house token, FTT, and offered high yields on customer deposits. This continued long after that summer, with Alameda taking out hefty loans to advance its business as well as the DeFi economy.

By then, altcoins and their holders had arrived. Entrepreneurs like Bankman-Fried enjoyed new riches and fame, which he used to prop himself up as a good, trustworthy crypto guy doing his best within a sea of scammers and failed companies. Yet Bitcoiners wanted none of it, viewing the creation of new coins, illiquid tokens, and token-centered communities as acting in opposition to maxis’ original plans. Tech figures with an affinity for Bitcoin, like Jack Dorsey and Peter Thiel, also joined this side of things, with the latter referring to alternative currencies like Ethereum as his “enemies.” (Ironically, the Thiel Foundation once awarded a grant to the very entrepreneur who helped invent and mainstream the Ethereum system.)

“I think ‘financialization of everything’ is a net negative for society,” Lubka told me. “I see crypto as taking this to its inevitable conclusion: hyperfinancialization.”

After FTX’s implosion, Lubka wrote an op-ed for CoinDesk in which he argued that “the culture, norms and values of crypto had a central role in the rise (and fall) of FTX,” and that recent events “validate[d] the way bitcoiners approach this industry.” That being: “Bitcoiners think leverage, subsidization of risk and turning everything into a speculative asset is actually massively net-negative for civilization.”

I asked Lubka how such assertions could be squared with the dropping value of Bitcoin as well as all the scams associated with the currency. “The point of financial markets is to price and facilitate the formation of capital, and Bitcoin provides uninterrupted pricing of capital,” he responded. “The issue with the current fiat system is that there are arbitrary adjustments to the settling of capital, through interest rates”—which may not affect Bitcoin directly, though they do have an effect on the overall crypto markets. What maxis would tell you here is that this is also crypto’s fault, for being too eager to tie their ventures to TradFi. (And TradFi, they’ll say, is far more corrupt than Bitcoin; the financial crisis is the whole reason Bitcoin was able to take off the way it did.)

One figure who embodied this misplaced zeal? None other than Bankman-Fried. To maxis, Paul Dylan-Ennis claimed, “SBF represents the worst of everything: the traditional elites, the corrupting institutions. And he made his money off DeFi, which they feel is corrupting the culture and taking away from Bitcoin.”

The suspicion was likely mutual, no matter how much Bitcoin arbitrage SBF engaged in on his way to the top. In an interview this May with the Financial Times, following a steep crypto-and-Bitcoin crash fueled by economic pessimism, SBF declared that “Bitcoin has no future as a payments network because of its inefficiency and high environmental costs” stemming from its preferred mining system. He didn’t think the Bitcoin network could efficiently facilitate transactions or scale more widely, and said the currency had a future as, at best, “an asset, a commodity and a store of value.”

Those weren’t uncommon critiques, but coming from such a major figure who’d made his riches off Bitcoin, they were certainly fighting words. (Cathie Wood claimed this week that SBF was anti-Bitcoin because he “couldn’t control it.”) When you combine that with his push for more crypto regulation in Washington, it’s clear he set himself up as a villain to the Bitcoin crowd: He supported legislation to place crypto-asset day trading under the regulation of the Commodity Futures Trading Commission, and to designate both Bitcoin and Ether as regulated commodities. This upset both DeFi and Bitcoin acolytes, in fact: The former said the bill would have “killed” DeFi by creating a centralized system for oversight while carving out protections for SBF’s biz; the latter wanted nothing whatsoever to do with the government.

In the end, both the Bitcoin camp and altcoin enthusiasts seemed to be happy to see SBF fall, with one CoinDesk editor opining, “In a real sense, Bankman-Fried never represented crypto.” But the Bitcoiners saw a deeper vindication. Just look at FTX, which held itself up with “shitcoins” and collapsed when it was revealed there was nothing there.

Who will prevail? There are numerous variables at play. Government regulators are going to keep their eyes on the space; as Bloomberg columnist Max Chafkin wrote, many will see the FTX collapse as vindication of high-level skepticism toward both Bitcoin and crypto. (Treasury Secretary Janet Yellen basically said as much last month.) A “mass exodus” of both crypto altcoins and Bitcoin holdings is underway.

Still, Bitcoin has fought against everything non-Bitcoin for a while, whether it’s less-energy-intensive ways of mining currency or building the whole weird “web3” thing, or even being included under the umbrella term crypto. Whatever happens to crypto, the Bitcoiners don’t want to be dragged down with it. And don’t forget how often the rumors of its impending death have been greatly exaggerated.

“If you’re gonna be skeptical of Bitcoin, be skeptical because of what Bitcoin is—not because of what crypto did,” Lubka told me. “I don’t want people to see FTX and say, ‘Bitcoin is no good.’ ” But after this year of bad crypto news, will new customers even want to find out?

This piece has been update to clarify how investor faith influence Bitcoin trading volume and value.