The European Central Bank is painting a very pessimistic outlook for bitcoin (BTC/USD), noting that the leading cryptocurrency is now at its “last stand” and may be on its way to “irrelevance”.
with regard to the reason outlookThe ECB points to a crash of bitcoin (from a high of $69,000 in November 2021 to a low of $16,000), following the collapse of Terra Luna in May and the collapse of crypto exchange FTX last month.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter today.
For crypto supporters, the crypto winter will eventually give way to a new bull run that sees prices hit new highs. This is due to the exit of weak hands amid heavy accumulation below around $20,000.
For the ECB, however, any jump in price from now on will not be due to the value of the cryptocurrency but will be driven purely by speculation.
According to the bank, bitcoin is not just unsuitable for payments, it doesn’t even qualify as an investment. For one, BTC does not generate cash flow as real estate or dividend is like shares, Bitcoin also has no productive value like commodities or provides social benefits as is the case, Sleep,
In short, the market valuation of bitcoin is based on direct speculation.
Retail investors being misled
While the ECB says that the bitcoin bubble has already burst, it notes that speculation and misconceptions about regulatory developments and the entry of financial players are giving undue legitimation to the crypto industry. The central bank suggests that such a perspective not only harms investors, but also poses a reputational risk to the banks involved.
“Since bitcoin appears to be suitable neither as a payment system nor as an investment, it should be considered as neither in regulatory terms and thus should not be legalized. Similarly, the Finance and Banking Industry One must be mindful of the long-term pitfalls of promoting bitcoin investments – despite the short-term gains they can make (even without their skin in the game).
Bitcoin is hovering around $17,000 after crashing hard since hitting that all-time high.
There have been 467 bitcoin tributes so far
Although not the first, it is by far the most aggressive attack on bitcoin from the ECB.
as inves previously reportedExecutive board member Fabio Panetta said in April that the crypto bubble had burst, threatening the entire financial ecosystem in a way that could be worse than what happened during the 2008 financial crash.
But this is not the first time that bitcoin has been declared dead. Since its inception in 2009, there have been 467 bitcoin obituary – all suggesting that the bubble has finally burst. In 2022, bitcoin has been declared dead 27 times, with crypto prices crashing in a bear market. Comments from the ECB’s Ulrich Bindseil and Jürgen Schaaf provided the latest example of bitcoin’s death.
The earliest death was in 2010 when it was argued that BTC could not be a currency.
Bitcoin Crypto Related Post