ECB Executives Doubt Bitcoin's Viable Investment Status Despite Recent ETF Approval
Summary:
The European Central Bank (ECB) remains skeptical about cryptocurrencies, despite recent Bitcoin ETF approvals by the SEC. In a blog post, ECB executives Ulrich Bindseil and Jürgen Schaaf argued that Bitcoin does not live up to its potential as a global decentralized digital currency or viable investment. They believe that the value of Bitcoin remains non-existent and that the surge brought on by recent ETF approvals is merely a brief phenomenon. The executives also stressed the need for continued regulation to protect society from potential threats linked to cryptocurrencies.
Despite signs of optimism in the cryptocurrency market, the European Central Bank (ECB) remains skeptical about digital currencies, clearly unimpressed by the recent Bitcoin (BTC) spot exchange-traded fund (ETF) approvals granted by the United States Securities and Exchange Commission (SEC). On February 22nd, Ulrich Bindseil, of the ECB's Market Infrastructure and Payments division, and Jürgen Schaaf, an adviser to the same unit, voiced their skepticism on the Bank's official blog, referring to Bitcoin's recently granted ETF status as akin to the fabled emperor's new clothes.
Bindseil and Schaaf challenge the assertion that BTC's ETF approval in the US lends credibility to BTC investments and stands as proof of Bitcoin's "indomitable success." They firmly maintain that Bitcoin's true value remains non-existent, saying, "A Bitcoin boom-bust cycle resurgence is a grim prospect for society, likely to result in extensive collateral damage including environmental harm and significant wealth redistribution away from the less experienced."
Citing their previous blog post in 2022, the pair assert that Bitcoin has not lived up to its potential as a global decentralized digital currency. They contend Bitcoin is also an unviable investment, producing no cash flow, dividends, or functional use, and providing no societal benefit or perceived value derived from noteworthy capabilities.
Despite the temporary increase in Bitcoin price seemingly driven by the spot ETF approval, the ECB executives suggest this could simply be a fleeting phenomenon. They note that the speculative nature of the Bitcoin market does not confirm solid price performance, arguing instead that Bitcoin's price inflation only points to the efficacy of Bitcoin lobbying efforts.
Their commentary concludes by stressing that the responsibility of regulating Bitcoin still needs attention. Authorities must maintain their vigilance to safeguard society from potential threats like money laundering, cybercrime, financial loss, particularly for less educated investors, and substantial environmental degradation.
In another commentary on February 19th, ECB executives, including board member Piero Cipollone, addressed rebuttals against claims suggesting the introduction of a digital euro might trigger a widespread banking crisis and that banks could consequently lose deposits as a long-term refinancing resource.
Published At
2/22/2024 2:25:54 PM
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