The European Central Bank has made it clear that the recent approval of spot bitcoin ETFs in the US does not change their view that the cryptocurrency holds no real value. In a blog post, ECB experts reiterated their concerns about the risks associated with bitcoin, including its negative impact on the environment and its use in criminal activity. They also warned about the potential for a “massive” collapse in the market due to the recent rally in prices.
The ECB’s Ulrich Bindseil and Jürgen Schaaf stated that the recent approval of bitcoin ETFs is like “the naked emperor’s new clothes,” and that the fair value of bitcoin is still zero. They cautioned investors against getting caught up in the hype and emphasized that bitcoin lacks the fundamentals to be considered a sound investment. They also highlighted the dangers of cybercrime and the environmental concerns surrounding bitcoin mining.
Despite the Securities and Exchange Commission’s approval of 11 US spot bitcoin ETFs, the ECB experts believe that a renewed boom-bust cycle in the market would be detrimental to society. They pointed out the potential damage to the environment and the unequal distribution of wealth that could occur as a result of such a cycle.
Bindseil and Schaaf also attributed the current bitcoin craze to price manipulation, the demand for a “currency of crime,” and the challenges faced by authorities in regulating the space. They warned that the expected rate cuts from the Federal Reserve and the upcoming halving event could further fuel the rally, but ultimately, the market will return to its fundamental values.
The ECB officials urged authorities to remain vigilant in monitoring and addressing bitcoin-related crime, as they believe it is still a pressing issue. They also stressed the importance of not being swayed by bitcoin’s inflated market capitalization, as it does not reflect its true value.
In conclusion, the ECB remains steadfast in their view that bitcoin is a “long con” and that its approval as an investment vehicle does not change the fact that it poses significant risks to society. They called on authorities to continue monitoring the market and taking action to prevent further harm.
