all about cryptop referances
On Wednesday, November 30, 2022, a blog post published by the European Central Bank (ECB) discusses bitcoin, and authors Ulrich Bindseil and Jürgen Schaaf seem to believe its “bitcoin’s last stand.” The ECB authors go on to say that while bitcoin’s price has consolidated and stabilized, central bank officials said “it is an artificially induced last gasp before the road to irrelevance.”
Two members of the European Central Bank, Ulrich Bindseil, the Director General of the ECB’s Market Infrastructure and Payments Department, and Jürgen Schaaf, Advisor to the ECB’s Payments Sector, published a blog post about the leading crypto-asset bitcoin (BTC).
The ECB blog post is called “Bitcoin’s Last Stand”, and the authors argue that the crypto-asset is becoming irrelevant. Bindseil and Schaaf explain that BTC’s price has fallen 76% below its $69K all-time high, and the authors note bitcoin supporters believe BTC is taking a “breather on its way to new highs.”
The ECB authors do not think this will be the case this time. “But more likely, however, it is an artificially induced last gasp before the road to irrelevance,” insist the authors of the ECB blog post. “And this was already predictable before FTX broke and sent the bitcoin price to well below USD16,000.”
The members of the European Central Bank further believe that “bitcoin has never been used to any significant extent for legitimate transactions in the real world.” The ECB’s blog post adds:
Bitcoin is also not suitable as an investment. It does not generate cash flow (like property) or dividends (like stocks), cannot be used productively (like commodities) or provide social benefits (like gold). The market valuation of Bitcoin is therefore based solely on speculation.
The authors do not necessarily use the terms, but Bindseil and Schaaf relate bitcoin to a Ponzi or pyramid scheme, as the authors emphasize that “speculative bubbles depend on new money flowing in.”
“Big Bitcoin investors have the strongest incentives to keep the euphoria going,” the blog post’s authors insist. While regulatory policy has grown around cryptocurrency assets, the two ECB officials believe that “regulation can be misconstrued as approval.” Bindseil and Schaaf are not too keen on the idea that the crypto space should be allowed to innovate “at any cost”.
Bitcoin’s innovative value, the ECB authors say, has been very small compared to the risks that supposedly outweigh innovation. The ECB paper states:
Firstly, these technologies have so far created limited value for society – no matter how great the expectations for the future. Secondly, the use of a promising technology is not a sufficient condition for an added value of a product based on it.
Finally, central bankers believe that banks that market bitcoin will carry reputational risk. The ECB members say that because they believe that bitcoin is not an appropriate investment or a payment system, “it should be treated as neither in regulatory terms and therefore should not be legitimized.”
Bindseil’s and Schaaf’s blog posts are very similar to the opinions of people like Peter Schiff, Charlie Munger, and the hundreds of so-called bitcoin obituaries published over the years. Despite the ECB’s opinion piece, there are many individuals, academic papers and companies who wholeheartedly disagree with the two governors.
The global head of blockchain at EY, Paul Brody, recently said that this crypto winter is a “much milder crypto winter than the last one.” Brody also said that fluctuations in crypto prices affect the industry’s growth much less these days. “For the first time ever, price ups and downs don’t have as much of an impact on the long-term growth of the industry,” Brody said.
Furthermore, an article published by Matthew Ferranti, a Harvard Ph.D. candidate in economics, says banks should hold some bitcoin. Ferranti said even central banks should consider holding bitcoin, and more specifically central banks struggling with financial sanctions depending on the financial institution’s availability of gold reserves.
What do you think of the ECB’s blog post on Bitcoin’s so-called ‘last stand?’ Do you agree with the officials from the European Central Bank? Let us know your thoughts on this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
On Wednesday, November 30, 2022, a blog post published by the European Central Bank (ECB) discusses bitcoin, and authors Ulrich Bindseil and Jürgen Schaaf seem to believe its “bitcoin’s last stand.” The ECB authors go on to say that while bitcoin’s price has consolidated and stabilized, central bank officials said “it is an artificially induced last gasp before the road to irrelevance.”
Two members of the European Central Bank, Ulrich Bindseil, the Director General of the ECB’s Market Infrastructure and Payments Department, and Jürgen Schaaf, Advisor to the ECB’s Payments Sector, published a blog post about the leading crypto-asset bitcoin (BTC).
The ECB blog post is called “Bitcoin’s Last Stand”, and the authors argue that the crypto-asset is becoming irrelevant. Bindseil and Schaaf explain that BTC’s price has fallen 76% below its $69K all-time high, and the authors note bitcoin supporters believe BTC is taking a “breather on its way to new highs.”
The ECB authors do not think this will be the case this time. “But more likely, however, it is an artificially induced last gasp before the road to irrelevance,” insist the authors of the ECB blog post. “And this was already predictable before FTX broke and sent the bitcoin price to well below USD16,000.”
The members of the European Central Bank further believe that “bitcoin has never been used to any significant extent for legitimate transactions in the real world.” The ECB’s blog post adds:
Bitcoin is also not suitable as an investment. It does not generate cash flow (like property) or dividends (like stocks), cannot be used productively (like commodities) or provide social benefits (like gold). The market valuation of Bitcoin is therefore based solely on speculation.
The authors do not necessarily use the terms, but Bindseil and Schaaf relate bitcoin to a Ponzi or pyramid scheme, as the authors emphasize that “speculative bubbles depend on new money flowing in.”
“Big Bitcoin investors have the strongest incentives to keep the euphoria going,” the blog post’s authors insist. While regulatory policy has grown around cryptocurrency assets, the two ECB officials believe that “regulation can be misconstrued as approval.” Bindseil and Schaaf are not too keen on the idea that the crypto space should be allowed to innovate “at any cost”.
Bitcoin’s innovative value, the ECB authors say, has been very small compared to the risks that supposedly outweigh innovation. The ECB paper states:
Firstly, these technologies have so far created limited value for society – no matter how great the expectations for the future. Secondly, the use of a promising technology is not a sufficient condition for an added value of a product based on it.
Finally, central bankers believe that banks that market bitcoin will carry reputational risk. The ECB members say that because they believe that bitcoin is not an appropriate investment or a payment system, “it should be treated as neither in regulatory terms and therefore should not be legitimized.”
Bindseil’s and Schaaf’s blog posts are very similar to the opinions of people like Peter Schiff, Charlie Munger, and the hundreds of so-called bitcoin obituaries published over the years. Despite the ECB’s opinion piece, there are many individuals, academic papers and companies who wholeheartedly disagree with the two governors.
The global head of blockchain at EY, Paul Brody, recently said that this crypto winter is a “much milder crypto winter than the last one.” Brody also said that fluctuations in crypto prices affect the industry’s growth much less these days. “For the first time ever, price ups and downs don’t have as much of an impact on the long-term growth of the industry,” Brody said.
Furthermore, an article published by Matthew Ferranti, a Harvard Ph.D. candidate in economics, says banks should hold some bitcoin. Ferranti said even central banks should consider holding bitcoin, and more specifically central banks struggling with financial sanctions depending on the financial institution’s availability of gold reserves.
What do you think of the ECB’s blog post on Bitcoin’s so-called ‘last stand?’ Do you agree with the officials from the European Central Bank? Let us know your thoughts on this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
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