On Thursday, the European Central Bank (ECB) published a blog repeating debunked claims about bitcoin {{BTC}}. The world’s first and largest cryptocurrency, according to ECB Director General Ulrich Bindseil and advisor Jürgen Schaaf, has failed as a currency and investment. And therefore, it has a fair value of “zero dollars.”
In other words: the central bank for the world’s largest trading block cannot recommend bitcoin because it’s going to crash.
This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.
“The latest approval of an ETF doesn’t change the fact that bitcoin is not suitable as means of payment or as an investment,” Bindseil and Schaaf wrote, referencing the fleet of spot bitcoin exchange-traded funds that went live in the U.S. in January, which have so far largely exceeded analyst predictions.
If it seems off that the ECB would comment at all on bitcoin, it’s likely because the authors too feel the Crypto Vibe Shift, and see a potential rally on the horizon following the successful launch of ETFs and the lifting of crypto winter. Bitcoin has more than doubled in price to above $51K in the last six months, according to CoinDesk Indices.
“For society, a renewed boom-bust cycle of Bitcoin is a dire perspective. And the collateral damage will be massive,” they write, adding later “Bitcoin’s price level is not an indicator of its sustainability.” Yet it is impossible for the authors not to acknowledge the recent gains, even if they predict the “speculative bubble” to someday pop.
“The rally in the autumn of 2023 was initiated by the prospect of an imminent turnaround in the U.S. Federal Reserve’s interest rate policy, the halving of the BTC mining rewards in spring [2024] and later the approval of the bitcoin spot ETF by the SEC,” Bindseil and Schaaf write. It’s an interesting move to reverse the clock to try to explain what “initiated” bitcoin’s rally considering all three of those factors — rate cuts, the halving and ETFs — are still in play.
Story…
..
