Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Despite Bitcoin’s Soaring Success, Critics Still Lurking

Despite Bitcoin’s Soaring Success, Critics Still Lurking

CryptopotatoCryptopotato2024/02/24 21:28
By:Wayne JonesMore posts by this author

ECB criticizes the SEC’s approval of Bitcoin ETF, maintaining that the asset’s fair value remains zero.

European Central Bank advisors have described the U.S. Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds in January as “the naked emperor’s new clothes” in their latest blog post.

The advisors, Ulrich Bindseil, ECB Director General for Market Infrastructure and Payments, and Advisor Jürgen Schaaf, criticized Bitcoin, outlining its unsuitability as a means of investment or payment.

ECB Advisors Challenge Bitcoin’s Validity

While the Bitcoin ETF approval in January was seen as validation for the crypto and a sign of its future success, Bindseil and Schaaf disagree. The ECB post outlines that for Bitcoin “disciples,” the ETF approval validates its safety, with the following price rally as evidence of its triumph.

The two advisors argue that Bitcoin’s fair value is zero. They expressed concern over the prospect of another boom and bust cycle for the asset, labeling it as a dire outlook with potentially massive collateral damage, including environmental harm and wealth redistribution disadvantaging the less informed.

The authors also highlighted that Bitcoin transactions remain sluggish, inconvenient, and costly, adding that beyond illicit activities on the dark net, the cryptocurrency has minimal payment usage. Further, even with El Salvador granting it legal tender status, it has failed to establish it as a viable means of payment.

Bindseil and Schaaf argue that the regulatory efforts to curb large-scale criminal use of Bitcoin have been ineffective. The cryptocurrency’s price has also faced a lot of manipulation, and the mining of Bitcoin using its proof-of-work consensus mechanism, which is energy-intensive, continues to pollute the environment on the same scale as entire countries.

The advisors also emphasize that Bitcoin is not a suitable investment due to its inability to generate cash flow. Unlike commodities, they said, Bitcoin lacks use and fails to provide social benefit. In addition, they expressed concern that less financially savvy retail investors were drawn into Bitcoin due to fear of missing out, putting them at risk of financial losses.

ECB’s ‘Last Gasp’ Critique

The latest criticism follows an ECB blog in November 2022 that asserted that Bitcoin was approaching its “last gasp” before becoming irrelevant. The remarks coincided with a market downturn after the FTX crypto exchange collapse .

In the post, the ECB argued against the premise that Bitcoin was a financial asset destined for a continued surge. However, Bitcoin reached its bear market low of $16,000 a week before the post was published but has since had a strong rebound, surging 225% to reach $51,930.

Meanwhile, in response to the question “Why is this dead cat bouncing so high,” the ECB advisors attributed the substantial rebound in Bitcoin to several factors. They pointed to expectations of a potential shift in U.S. Federal Reserve interest rate policy, the upcoming halving event for Bitcoin in April, whereby the block reward for miners is halved, and the recent introduction of spot ETFs as key drivers behind the surge.

You Might Also Like:

  • Bitcoin Whales Scoop Up Over 100,000 BTC in 10 Days in Rapid Accumulation
  • CBOE Confirms Multiple Bitcoin ETPs Will Begin Trading Tomorrow
  • Dormant Bitcoin Whale Transfers $137 Million in BTC After 4 Years
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!