Is Bitcoin heading towards its demise, or is it just a bad phase from which it will emerge stronger? The European Central Bank is clear about it…
The cryptocurrencies They have always had their detractors, and it must be admitted that now it is easier than ever to criticize them. He European Central Bank (ECB) has published a harsh statement accusing the Bitcoin of being expensive, slow, and not adding value. He assures that he is on his way to being Irrelevant.
He ECB It is the largest economic body in the European Union. It is in charge, among many other things, of regulating prices and containing expenses.
It is not a secret that the European Central Bank has always been against cryptocurrencies. But release published yesterday on his blog by CEO Ulrich Bindseil and analyst Jürgen Schaff, is particularly harsh.
The European Central Bank, against Bitcoin
Surprised (as everyone) by the invasion of Ukraine, inflation and the cost of energy that the war has brought has made plummet the bitcoin quoteand the rest of cryptos.
From $69,000 it was worth in 2021, it fell to $16,000 in the summer. Today it is trading at 16,108 euros. The bankruptcy of FTX, or the recent one of BlockFi, have not helped the recovery. Quite the opposite.
In the last half year the Bitcoin has stabilized between the 16,000 and the 20,000 dollars. And although that could mean stability before the recovery, the ECB believes the opposite: “is an artificially induced last gasp before the road to irrelevance“.
He ECB also ensures that Bitcoin is rarely used in legal transactions:”Actual Bitcoin transactions are cumbersome, slow, and expensive. It has never been used in any meaningful way for real-world legal transactions.“.
Also remember that Bitcoin is good for nothing, except to speculate:”it does not generate cash flow (like real estate) or dividends (like stocks), cannot be used productively (like commodities), or provide social benefits (like gold). Therefore, the Bitcoin market valuation is purely based on speculation.“.
And warns: regulating crypto should not be confused with approving it.
The energy cost of Bitcoin
The statement from the European Central Bank also criticizes the energy waste of Bitcoin.
ensures that consumes as much electricity as an entire country, Austria, but it only benefits a few who speculate with it. And the e-waste it generates is enormous:
“A Bitcoin transaction consumes hardware comparable to that of two smartphones. The entire Bitcoin system generates as much e-waste as the entire Netherlands. This inefficiency of the system is not a flaw, but a feature. It is one of the peculiarities to guarantee the integrity of the completely decentralized system.“
And he concludes: “Since Bitcoin does not seem to be suitable either as a payment system or as a form of investment, it should not be treated as either in regulatory terms and therefore should not be legitimized.“.
At the opposite extreme we have star investors from Wall Street like Cathie Wood, who assures that Bitcoin will trade at a million dollars in 2030.
With the European Central Bank so against of the Bitcoin, it will be difficult for them to integrate into the European economy. Depending on whom you ask, they will tell you that these are legitimate criticisms, or just defensive arguments of the centralized economic systems that cryptocurrencies they intend to collapse Who has the reason?
