High-ranking members of the European Central Bank (ECB) say that Bitcoin (BTC) is on the cusp of becoming an irrelevant asset.
In a new blog post, ECB officials Ulrich Bindseil and Jürgen Schaaf say that the king crypto’s price drop from its peak of $69,000 set in November 2021 is an indicator that BTC is on its last legs.
The duo says that while Bitcoin’s price has recently stabilized, investors shouldn’t take it as a sign that the flagship cryptocurrency will rise again.
“The value of Bitcoin peaked at $69,000 in November 2021 before falling to $17,000 by mid-June 2022. Since then, the value has fluctuated around $20,000. For Bitcoin proponents, the seeming stabilization signals a breather on the way to new heights.
More likely, however, it is an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the Bitcoin price to well below $16,000.”
The officials go on to question Bitcoin’s utility, saying its technology is not fit for payments and that its valuation is purely based on speculation. They also say that BTC is not suitable as an investment as it lacks characteristics found in traditional assets.
“Bitcoin’s conceptual design and technological shortcomings make it questionable as a means of payment: real Bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant extent for legal real-world transactions.
In the mid-2010s, the hope that Bitcoin’s value would inevitably rise to ever new heights began to dominate the narrative. But Bitcoin is also not suitable as an investment. It does not generate cash flow (like real estate) or dividends (like equities), cannot be used productively (like commodities) or provide social benefits (like gold).
The market valuation of Bitcoin is therefore based purely on speculation.”
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