According to a newly released report by the ECB, Bitcoin is in the final stages of becoming irrelevant due to its many shortcomings. The report stated that Bitcoin’s value stems from mere speculation, and its recent stability was the result of price manipulation.
Despite being touted as a revolutionary payment system and an investment asset, the European Central Bank feels the long-term damage of promoting Bitcoin investments is not worth the risk. In fact, the statement went on to stress that Bitcoin’s road to irrelevancy began way before the FTX-instigated market turmoil.
ECB’s Director General Ulrich Bindseil and Advisor Jürgen Schaff, the authors of the report also mentioned matters shaping the current regulation around cryptocurrencies and blamed innovative misconception as the key reason inhibiting tight regulations around Bitcoin. The duo noted a promising technology does not necessarily guarantee value addition or disruption.
The apparent stabilisation of bitcoin’s value is likely to be an artificially induced last gasp before the crypto-asset embarks on a road to irrelevance. #TheECBblog looks at where bitcoin stands amid widespread volatility in the crypto markets.
Read more https://t.co/Hk1LuYX2de pic.twitter.com/I3Uidks8Xo
— European Central Bank (@ecb) November 30, 2022
Twitter’s crypto community responded to the ECB report by making fun of a 2021 video in which the ECB President Christian Lagarde made a bold prediction that inflation would decline in 2022. A Twitter commentator reacted by commenting on the report with the video and captioning, “Their predictions are always in point”
If the ECB says so it must be true.? I mean they have clearly seen inflation coming and reacted in a timely manner. Their predictions are always in point. ?https://t.co/ZIZ03wyk2D
— Jan Wüstenfeld (@JanWues) November 30, 2022
The ECB has remained a vocal cryptocurrency observer since outlining steps towards a digital euro during last year’s final quarter. However, the bank’s latest statement seems to dismiss Bitcoin as an investment asset after outlining its value as based on pure speculation.
Lagarde has over time stressed the need for the watchdog to step up as a global regulator and address people’s growing interest in cryptocurrencies. While speaking during a Nov.28 hearing of the Committee on Economic and Monetary Affairs of the European Parliament, Lagarde insisted the ECB was already ahead in terms of crypto regulation.