The European Central Bank slams BTC as “worthless”. How do industry elites fight back?

Source: Blockchain Knights

ECB officials Ulrich Bindseil and Jürgen Schaaf recently published a blog post on the ECB blog, severely criticizing BTC, asserting that BTC is not able to fulfill its promise as a global decentralized digital currency.

This article titled "ETF approval for bitcoin – the naked emperor's new clothes" was published on February 22, 2024. Published after the SEC (U.S. Securities and Exchange Commission) approved spot ETFs.

The ECB’s statement on . The recently approved ETF does not change the fact that BTC is expensive, slow, and inconvenient."

Bindseil and Schaaf believe that BTC is not widely used for legal transfers and is not suitable as a means of payment or investment tool.

They criticized thatCrypto assets cannot generate any cash flow, dividends or social benefits and are an environmentally harmful tool due to the energy-intensive proof-of-work mechanism used in the mining process. .

Although the SEC approved the spot BTC ETF, which was seen by many as a verification of the safety of Crypto asset investments and a precursor to a rebound, ECB officials insisted that the "fair value" of BTC is zero.

European Central Bank officials called the recent BTC price rebound a "back in the day" and pointed to the speculative nature of BTC price increases, warning that the boom-and-bust cycle could return There could be significant collateral damage, including environmental harm and wealth redistribution at the expense of less sophisticated investors.

The blog post also addressed the issue of BTC being used for illegal activities, pointing out that transactions related to money laundering, terrorist financing, and ransomware attacks continue to increase.

European Central Bank officials criticized the regulatory approaches in Europe and the United States, believing that the decentralized nature of BTC led to regulatory fatalism and failed to effectively solve these problems.

Furthermore, the blog also highlights the irony of BTC, a Crypto asset designed to bypass the traditional financial system and rely on traditional intermediaries such as ETFs to attract a wider investor base. The author believes that this highlights the speculative and unproductive nature of BTC as an asset.

The blog post concluded: “BTC’s price level is not an indicator of its sustainability. There is no fundamental economic data and no fair value from which to draw rigorous predictions. There is no 'price basis' in a speculative bubble and market capitalization quantifies the overall social damage that will be caused when the house of cards collapses."

The ECB's latest criticism triggered a strong reaction from the community. Some prominent figures in the BTC ecosystem have come out to question the ECB’s views.

James Butterfill, head of research at Coin Shares, expressed disbelief in the ECB’s stance, saying: “The ECB’s understanding of BTC as an asset, and its impact on the environment, is starting to look like It’s a bit like a joke.”

Alessandro Ottaviani sharply criticized the European Central Bank’s previous assessment of BTC, emphasizing that since the European Central Bank published an article in November 2022, it said that BTC is on the road to “irrelevance.” On the Road”, the price of Crypto assets has increased significantly.

Ottaviani said: “The European Central Bank wrote in November 2022 that ‘BTC is embarking on a path of irrelevance.’ At that time, the price of BTC was $17,000, and the current price is $52,000, a year-on-year increase of 205%. They were wrong 15 months ago, and they are wrong now. Time will tell. BTC is the best form of money ever created by mankind, and it is not on the path to becoming a global value Storing an irreversible path.” Daniel Batten, managing partner of CH4 Capital, took a more humorous approach in his response, highlighting misunderstandings and misunderstandings about BTC’s utility and adoption.

Batten sarcastically thanked the ECB for their “entertainment,” arguing that their analysis failed to capture BTC’s actual status and potential as a decentralized digital currency and investment asset.

Batten pointed out: "Failed to become a global decentralized digital currency? BTC has more than 300 million users in just 15 years. In terms of user adoption, it is growing faster than the Internet .”

He also corrected the European Central Bank’s underestimation of BTC’s coverage and influence.

Dan Held mentioned something the ECB itself said in 2012, which makes it clear why the ECB is so hostile to BTC: fear of monetary revolution.

The European Central Bank wrote in 2012: “BTC may have a negative impact on the reputation of central banks, assuming that the use of such systems increases and that, in the event of an event that attracts the media, the public may It is believed that the incident was caused by the central bank not doing its job well."