The ECB Criticizes Bitcoin as a Failed Global Currency
In a recent blog post on The ECB Blog, European Central Bank officials Ulrich Bindseil and JΓΌrgen Schaaf delivered a scathing critique of Bitcoin, asserting that it has failed to fulfill its promise as a global decentralized digital currency. The post, titled “ETF approval for bitcoin β the naked emperor’s new clothes,” was published on February 22, 2024, and comes in the wake of the US Securities and Exchange Commission’s (SEC) approval of spot exchange-traded funds (ETFs).
ECB Tries Once Again To Defame Bitcoin
The European Central Bank (ECB) recently published a blog post criticizing Bitcoin’s failure to become a global decentralized digital currency. The ECB officials argue that Bitcoin has fallen victim to fraud and manipulation and highlight its high cost, slow transactions, and inconvenience. They also claim that Bitcoin does not generate cash flow or social benefits and causes environmental harm due to energy-intensive mining.
The ECB officials maintain that despite the SEC’s approval of BTC spot ETFs, Bitcoin’s “fair value remains zero.” They refer to the recent price rally as a “dead cat bounce” and warn of potential collateral damage from a boom-bust cycle. The blog post also addresses Bitcoin’s use in illicit activities and criticizes regulatory approaches in Europe and the US.
The authors point out the irony of Bitcoin relying on conventional intermediaries like ETFs to attract investors, undermining its goal of bypassing traditional financial systems. They conclude that Bitcoin’s price level is not an indicator of its sustainability and warn of potential social damage when the “house of cards collapses.”
The Bitcoin Community Reacts
The ECB’s critique has sparked reactions from the Bitcoin community. James Butterfill, Head of Research at Coin Shares, expressed disbelief at the ECB’s understanding of Bitcoin as an asset. Alessandro Ottaviani criticized the ECB’s previous assessments of Bitcoin and highlighted its significant price appreciation. Daniel Batten, managing partner at CH4 Capital, sarcastically thanked the ECB for their “entertainment” and corrected their underestimation of Bitcoin’s reach and impact.
Dan Held referred to the ECB’s fear of a monetary revolution as the reason behind their hostility towards Bitcoin. At press time, BTC traded at $51,116.
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