BTC Price Index and Live Chart – CoinDesk”>(BTC). , the world’s largest cryptocurrency according to ECB director general Ulrich Bindseil, and advisor Jurgen Shaaf, failed as a currency or investment. It has an “equitable value” of “zero dollar.”

The central bank of the largest trading bloc in the world cannot recommend bitcoin, because the currency is going to crash .

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The fleet exchange-traded bitcoin funds launched in the U.S. last January and have so far exceeded analyst expectations.

It’s possible that the ECB is commenting on bitcoin because they too are feeling the Vibe Shift and expect a rally to come after the successful launch ETFs and lifting of the crypto winter. CoinDesk Indicators shows that Bitcoin’s price has increased by more than twofold to $51K over the past six months.

For society, a new boom-bust Bitcoin cycle is a dire prospect. The collateral damage would be huge,” they wrote, later adding “Bitcoin’s price level does not indicate its sustainability.” The authors cannot ignore the recent gains even if the “speculative boom” is predicted to pop someday.

Bindseil & Schaaf explain that “the rally in the fall of 2023 was triggered by the prospect of a imminent turnaround in U.S. Federal Reserve interest rate policy. The halving in BTC mining rewards by spring [2024] followed by the SEC’s approval of the Bitcoin spot ETF.” It is interesting to turn back the clock and try to explain the “initiation” of bitcoin’s rally, considering that all three factors — the rate cuts, halvings and ETFs — remain in play.

The authors claim that despite these economic drivers, bitcoin is “still not suitable as an asset” due to its lack of cash flow, dividends or productive commercial applications, and because of its “social benefit.” They also say that the interest in the asset stems mainly from FOMO and the “effectiveness of the Bitcoin Lobby.”

Why have Bitcoin boosters proven so successful over the years exactly? Why is stablecoin adoption so rapid in countries with hyperinflations? Why are people in the U.S., and E.U. so interested in bitcoin? The answers to these questions are not asked, perhaps because the value of the euro has declined by 99.5% compared to bitcoin over the last decade, according TradingView Data.

This is not the first time that the ECB predicted the demise of bitcoin. Bindseil and Schaaf predicted that a jump from $17,000 to $20,000. in the weeks following the collapse of FTX, was a dead cat bounce and an “artificially induced final gasp” before the road to irrelevant.

Bindseil & Schaaf do not want to consider why people are interested (for example, inflation or savings were never mentioned), and they argue that the rise in interest could be explained by fraud and “price manipulating”. They cite an Forbes Study that was conducted in 2022 and found that 51% of the reported bitcoin exchange volume were probably faked. This study, I should add, does not make Bindseil’s mistake by conflating prices with volumes.

The authors are unable to resist the temptation to see bitcoin as a criminal organization, drawing parallels between events and suggesting that abuse anywhere is abuse everywhere. They discuss at one point how the U.S. Securities and Exchange Commission Twitter/X was hacked in order to post fake news, such as bitcoin ETFs. This may be just me, but that’s a bad reflection on the SEC rather than the Bitcoin network.

The ECB has either been deliberately lying about bitcoin’s criminal use or is genuinely misinforming itself. This claim, which has been repeatedly debunked, is a long-standing one. The authors state that “despite the market downturn the volume of illicit transaction has continued to increase.”

The claim that bitcoin is the “top choice for money laundering” in the digital age is also patently false. It’s not fair to compare bitcoin with the U.S. Dollar, which is the dominant currency in online and global crime. But why was , the 500-euro note, banned?

The authors then contradict themselves directly when they discuss the exact reason bitcoin is losing favor with criminals: it’s because it runs on an unalterable, public, and transparent ledger. They write: “Bitcoin has therefore been a cursed anonymity tool, facilitating illegal activities and leading legal action against offenders through the tracing transactions.”

The authors are correct when they say that “the decentralised nature” of Bitcoin can present challenges to authorities and sometimes lead to regulatory fatalism. However, this does not mean that it cannot be regulated.

predicting Bitcoin’s death would be better than the ECB doing that for the thousandth and final time.