First of all, Brad Delong is a respected economist. He is not stupid and certainly not a troll like Krugman. His concerns are valid, but in this case his arguments are weak and poorly formed.

The crux of his argument against Bitcoin is poorly formed in that he says that if Bitcoin is not better than all aspects of the dollar or gold, then it is ultimately worthless. Of course, this is a poor argument because every form of money can be perceived to have strengths and weaknesses, including Bitcoin. He wants to hold Bitcoin to an impossible standard, higher than anything else.

His individual arguments are weak. They fundamentally argue that Bitcoin ultimately has no utility that will support its value, but I can demonstrate that he is wrong.

He argues that the dollar has value primarily because it must be used to pay taxes and that Bitcoin has no such equivalent. At the core, his argument is that the dollar has value because it has this specific utility. Well, Bitcoin has (a much broader) utility, therefore it has value for the same reason that he claims the dollar has value. Furthermore, his statement that "the Federal Reserve is a potential dollar sink and has promised to buy them back ... (yes, I know)" is an argument that even he doesn't take seriously.

He argues that gold has an intrinsic value due to its non-monetary utility. Firstly, if gold's value were based solely on its use in jewelry, then its value would be a small fraction of its current value. Secondly, Bitcoin has tremendous utility beyond the monetary aspects, including escrow and contracts. There are applications of the Bitcoin protocol that have not been discovered yet. Even if people didn't use bitcoins as a medium of exchange or a store of value, the bitcoins would still have utility.

Finally, regarding his search for a market player willing to become a bitcoin sink. I challenge him to find a market player willing to become a gold sink. I gold ever went out of favor, which is possible but unlikely, I doubt that there would be any single entity willing to step in a buy all the gold in the world.