Analysts at the European Central Bank (ECB) maintain their skepticism towards Bitcoin’s value despite the recent approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Ulrich Bindseil, Director General of Market Infrastructure & Payments, and Jürgen Schaaf, Adviser in Market Infrastructure & Payments at the ECB, emphasized in a recent blog post that the approval of spot Bitcoin ETFs has not altered their assessment that Bitcoin’s fair value remains “zero.”
Contrary to Bitcoin’s claims of being a global decentralized digital currency and a lucrative financial asset, the analysts underscored their reservations regarding Bitcoin’s practical utility and highlighted the societal and environmental risks associated with its resurgence.
According to Bindseil and Schaaf, Bitcoin has fallen short of its promise as a global decentralized digital currency and is still rarely used for legitimate transactions. They pointed out Bitcoin’s persistent shortcomings as a medium of payment and investment, describing it as “inconvenient, slow, and costly.” Despite initiatives like its adoption as legal tender in El Salvador, Bitcoin has struggled to gain widespread acceptance as a reliable means of payment.
Moreover, the ECB analysts raised concerns about Bitcoin’s history of price manipulation and fraudulent activities, attributing these issues to its lack of intrinsic value. They stressed the need for stricter regulations to address risks such as money laundering, cybercrime, financial losses, and environmental harm associated with Bitcoin.
The analysts emphasized that Bitcoin’s price level does not accurately reflect its sustainability or economic fundamentals, advocating for increased vigilance in regulating the crypto market.
In January, the SEC’s approval of multiple spot Bitcoin ETFs for listing on registered national exchanges marked a significant development in the crypto industry after years of anticipation.
Despite regulatory advancements, the ECB remains cautious about Bitcoin’s long-term viability and its potential impact on financial stability and societal well-being.
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