European Central Bank Says Bitcoin Fair Value is Still Zero Regardless of ETFs
The ECB report criticises Bitcoin’s functionality and environmental impact, suggesting a ban over perceived regulatory approval.
Despite critical views from the ECB, some in the crypto community see the report as inadvertently bullish.
Community on X highlights Bitcoin’s value increase amidst criticism and calls into question the effectiveness of traditional financial perspectives against Bitcoin’s resilience.
Despite the Spot Bitcoin ETF approval in the United States there is nothing fundamentally of value with BTC, a report by two European Central Bank (ECB) officials released this week said.
Although the ETFs have seen impressive inflows and drove the price of BTC up these two ECB officials don’t believe the hype. In fact, they believe the damage caused by Bitcoin will be huge, saying:
For society, a renewed boom-bust cycle of Bitcoin is a dire perspective. And the collateral damage will be massive, including the environmental damage and the ultimate redistribution of wealth at the expense of the less sophisticated.
EU Officials: “Risks Have Materialised”
The ECB writers dismissed Bitcoin’s claim to be a global, decentralised currency and said a perceived regulatory blessing was the wrong signal, arguing a ban would be more appropriate.
Unfortunately, the officials fail to understand that US SEC (Securities and Exchange Commission) chief Gary Gensler has stated the ETF approval is not an endorsement of Bitcoin or crypto.
Proof-of-Work (PoW) is bad for the environment
BTC is not suited as an investment because it is useless.
It does not generate any cash flow (unlike real estate) or dividends (stocks), cannot be used productively (commodities), and offers no social benefit (gold jewellery) or subjective appreciation based on outstanding abilities (works of art).
However, some in the crypto community find the ECB’s stance bullish for the sector as a whole and the price for Bitcoin in particular—citing recent ECB reports actually saw an increase in BTC price.
This is bullish.
After ECB published “Bitcoin’s last stand” – Bitcoin has risen 197%
Keep the FUD coming ECB.
There are over 400Million people globally who have been vaccinated against it now, growing exponentially. pic.twitter.com/QNypWEFYAd
— Daniel Batten (@DSBatten) February 22, 2024
“So why is this dead cat bouncing so high?”
The report authors then go on to state that the 2023 autumn rally in Bitcoin was spurred by anticipation of U.S. interest rate cuts, a reduction in Bitcoin mining rewards, and the SEC’s approval of a Bitcoin spot ETF.
However, such a rally might be short-lived, according to the officials, as asset prices eventually align with their fundamental values, which could be minimal for assets like Bitcoin that lack cash flow. The enthusiasm for Bitcoin ETFs, despite their deviation from ETFs’ traditional purpose of risk diversification, and the scheduled halving of mining rewards, are seen more as speculative triggers than sustainable growth drivers.
Still, this could turn out to be a flash in the pan. […] without any cash flow or other returns, the fair value of an asset is zero. Detached from economic fundamentals every price is equally (im)plausible – a fantastic condition for snake oil salesmen.
They claim the rally’s persistence may owe more to market manipulation, its use for illicit transactions, and regulatory challenges than to solid economic fundamentals.
In contrast to the damning report, some users on X have pointed out that the Euro’s continuous devaluation against Bitcoin shows a significant loss in its value.
The Euro has lost 99.5% of its value vs. #Bitcoin in less than 10 years.
Meanwhile, 97% of all trading days are in profit for Bitcoin.
Meaning anyone who has euro-cost-averaged into Bitcoin instead of holding onto the ECBs flaming garbage is massively in profit right now.… pic.twitter.com/G74UT8bcPR
— Stack Hodler (@stackhodler) February 22, 2024
The post European Central Bank Says Bitcoin Fair Value is Still Zero Regardless of ETFs appeared first on Crypto News Australia.
Filed under: Bitcoin - @ February 23, 2024 4:14 am