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Think the Securities and Exchange Commission is hard on digital assets? Officials at the European Central Bank cranked up the criticism in a note on Thursday that said Bitcoin was worth nothing.
A post on the ECB blog Thursday by Ulrich Bindseil and Jürgen Schaaf—two officials at the central bank—was a direct response to the SEC’s landmark approval last month of the first spot Bitcoin exchange-traded funds. The long-awaited decision has triggered the latest rally in Bitcoin prices as crypto bulls hope the funds will usher…
Think the Securities and Exchange Commission is hard on digital assets? Officials at the European Central Bank cranked up the criticism in a note on Thursday that said
was worth nothing.
A post on the ECB blog Thursday by Ulrich Bindseil and Jürgen Schaaf—two officials at the central bank—was a direct response to the SEC’s landmark approval last month of the first spot Bitcoin exchange-traded funds. The long-awaited decision has triggered the latest rally in Bitcoin prices as crypto bulls hope the funds will usher in a fresh wave of investor interest in tokens.
Bindseil is director general of markets infrastructure and payments at the ECB and Schaaf is an adviser in that department.
“For disciples, the formal approval confirms that Bitcoin investments are safe and the preceding rally is proof of an unstoppable triumph. We disagree with both claims and reiterate that the fair value of Bitcoin is still zero,” wrote the ECB officials. “The latest approval of an ETF doesn’t change the fact that Bitcoin is not suitable as means of payment or as an investment.”
Their criticisms were familiar: Bitcoin has no fundamental value beyond what supply and demand dynamics give it; prices can be manipulated; it is highly energy-intensive; and it is used to fund crime and launder money. Moreover, the ECB officials said, the latest crypto rally itself posed a danger to investors—a point that refers to deep losses shouldered by retail investors in the brutal bear market in tokens that began in 2022 and lasted through much of 2023.
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“For society, a renewed boom-bust cycle of Bitcoin is a dire perspective,” wrote Bindseil and Schaaf. “And the collateral damage will be massive, including the environmental damage and the ultimate redistribution of wealth at the expense of the less sophisticated.”
For now, at least, Bitcoin remains in that boom phase. Prices have been running higher over the past 24 hours and are near their highest levels since late 2021.
Write to Jack Denton at jack.denton@barrons.com
Read More: Bitcoin Isn’t Suitable for Anything, ECB Officials Say. ETFs Don’t Change That.
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