Bitcoin remains a controversial topic, despite its recent approval for inclusion in Exchange-Traded Funds (ETFs) in the US, as noted by two European Central Bank staff members in a recent blog post.
Ulrich Bindseil, the director general of market infrastructure and payments in Frankfurt, along with adviser Juergen Schaaf, reiterated their longstanding concerns about the cryptocurrency’s lack of intrinsic value and the risks it poses to society and the environment.
In their blog post, they expressed disagreement with the notion that Bitcoin investments are safe or that its recent surge in value signifies an unstoppable success. Instead, they maintain that Bitcoin’s fair value is still zero.
Despite the approval of the first US spot Bitcoin ETFs by the Securities and Exchange Commission, which attracted significant investment, Bindseil and Schaaf cautioned against the sustainability of Bitcoin’s price surge, arguing that without underlying cash flow or returns, its value remains speculative.
They highlighted three key factors contributing to Bitcoin’s resilience: market manipulation, its association with illicit activities, and regulatory shortcomings.
Moreover, the authors warned about the potential social and economic fallout in the event of a Bitcoin market collapse, emphasizing the importance of regulatory vigilance to protect against money laundering, cybercrime, financial losses, and environmental damage.
Overall, their message underscores the need for cautious oversight and measures to mitigate the risks associated with Bitcoin and other cryptocurrencies.
