> does that mean what the FED is doing through monetary policy zero sum?

It leads to malinvestment as you pointed out.

> Can this be true? Or am I looking at the situation too simplistically?

I agree. It's a wealth transfer.

> Or do you look at the protocol as having no intrinsic value (pure fiat)? And do you think that that matters as a currency?

I'm not a Bitcoin expert. Right now I see no value in it in the short term other than a speculative investment.

There is much political uncertainty surrounding it. It could go to zero in a day.

Like you say, gold has over 5000 years as a consistent store of value. Bitcoin is a few years old and wildly volatile.

Do I believe a crypto-currency with no real-world backing could thrive? Sure, someday.

Do I believe that crypto-currency will be Bitcoin? I have no clue.