Cointime

Download App
iOS & Android

Bitcoin’s Value Artificially Inflated and Rarely Used for Legal Transactions, Says ECB

Bitcoin has a regulation problem, i.e., major regulatory agencies do not understand it.

The latest critique came from the top leadership at European Central Bank (ECB), who stated that Bitcoin’s value “is likely to be artificially induced” while adding that the crypto-asset is on a “road to irrelevance.”

In the blog post, ECB Director General Ulrich Bindseil and Analyst Jürgen Schaff went on to claim that the world’s largest cryptocurrency has “never been used to any significant extent for legal real-world transactions.” The duo even blamed Bitcoin’s “conceptual design and technological shortcomings” that make it “questionable as a means of payment.”

Another Bitcoin Critic

The post made no mention of any specific data points suggesting how the central bank officials came to the conclusion that Bitcoin’s market valuation is based on pure “speculation.” Their statements appear to be highly biased, as noted by many industry experts.

The officials stated, “the belief that space must be given to innovation at all costs stubbornly persists.” The duo does not seem impressed by Bitcoin’s underlying technology – blockchain. According to them, DLT/blockchain has so far “created limited value for society” regardless of “how great the expectations for the future.”

It also called Bitcoin an “unprecedented polluter,” arguing the age-old debate surrounding crypto mining of Proof-of-Work based coins.

“Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimized. Similarly, the financial industry should be wary of the long-term damage of promoting Bitcoin investments – despite short-term profits they could make (even without their skin in the game).”

Critics Get Louder After FTX Scandal

Crypto had chaotic days in the past. But the collapse of FTX and the subsequent accusations of fund appropriation tainted the industry. The cascading events then pushed other platforms, which were following a safe path to growth instead of the crypto riches, to face the wrath of potentially unsensible regulations.

The catastrophe appears to be strengthening the hands of critics and powering regulatory entities to police the industry.

Hence, as critics got louder, calls for regulation in the space followed suit. FTX’s insolvency will likely expedite digital asset regulation in the United States. A new law called Markets in Crypto Assets (MiCA) in the European Union (EU), which won’t take effect for a few years, is expected to impose governance standards for crypto companies similar to other kinds of regulated financial firms in a bid to avert internal failings such as that of FTX’s.

However, the ECB officials said that regulations should not be mistaken for approval.

BTC
Comments

All Comments

Recommended for you

  • Robinhood Chief Legal Officer Dan Gallagher Says He Won't Become SEC Chairman

    According to market news, Dan Gallagher, the Chief Legal Officer of Robinhood, stated that he would not serve as the Chairman of the US Securities and Exchange Commission.

  • Cosine: After a user used GPT to write a bot with a backdoor code, the private key was sent to a phishing website

    SlowMist Yu Xian stated in a post on the X platform that a user used GPT to write a bot with code and sent the private key to a phishing website. The reason why the private key was stolen was because it was directly sent to the phishing website in the HTTP request body. Yu Xian reminded that when using LLM such as GPT/Claude, one must pay attention to the common fraudulent behavior of these LLM. It was previously mentioned that AI poisoning attacks were carried out, and now this is a real attack case targeting the crypto industry.

  • U.S. Supreme Court rejects Facebook's attempt to avoid shareholder securities fraud lawsuit

     US Supreme Court rejected Facebook's attempt to avoid shareholder securities fraud lawsuits under the META umbrella.

  • The final value of the US one-year inflation rate in November is expected to be 2.6%, the expected value is 2.7%, and the previous value is 2.60%

     the expected final value of the US one-year inflation rate in November is 2.6%, with an expected value of 2.7% and a previous value of 2.60%. The expected final value of the US five-to-ten-year inflation rate in November is 3.2%, with an expected value of 3.1% and a previous value of 3.10%.

  • Polymarket Blocks French Users Amid Government Investigation into Gambling Law Compliance

    Polymarket has blocked users from France following reports of an investigation by the country's gaming authority for compliance with gambling laws. The ban was not stated in Polymarket's terms of service, but French users attempting to access the website using a VPN from a French server were met with a digital blockade. The ANJ, France's national gaming authority, began investigating Polymarket after a French trader placed large bets on Donald Trump winning the 2024 US Presidential election.

  • BTC falls below $67,000

    market shows BTC has fallen below $67,000, currently reporting at $66,987.51, with a 24-hour increase of 0.41%. The market is experiencing significant fluctuations, please be prepared for risk control.

  • BTC breaks through $67,000

    the market shows BTC has broken through $67,000 and is currently trading at $67,011.99, with a 24-hour decline of 0.26%. The market is volatile, so please be prepared to manage risks.

  • Crypto Options Traders Bet on Bitcoin to Reach Fresh Highs by End of November

    According to Bloomberg, options traders in the crypto market are increasingly betting on bitcoin reaching new highs by the end of November. The $75,000 strike price has the highest open interest for options expiring on November 8, indicating a significant area of focus for the market during that time. Despite the upcoming U.S. presidential election, some traders believe that bitcoin will surpass its previous highs in the coming weeks. The rise in stablecoin liquidity and bitcoin transactions in October may contribute to this bullish sentiment.

  • BTC falls below $67,000

     market shows BTC has fallen below $67,000 and is now trading at $66,988.89, with a 24-hour decline of 2.24%. The market is volatile, so please be prepared for risk control.

  • BTC breaks through $68,600

    the market shows BTC has broken through $68,600 and is now trading at $68,602.48, with a 24-hour increase of 0.67%. The market is volatile, so please be prepared for risk control.