ECB Officials Continue to Doubt Bitcoin's Value Despite ETF Approvals

By: Eliza Bennet

Despite Bitcoin's recent surge beyond $50,000 due to multiple exchange-traded funds (ETFs) launch in the United States, European Central Bank (ECB) officials continue to assess that Bitcoin holds no intrinsic value. In a blog post on Feb. 22, ECB officials Ulrich Bindseil and Jürgen Schaaf reiterated that the approval of ETFs does not alter Bitcoin's unsuitability as a medium of exchange or an investment vehicle.

The officials rejected claims from Bitcoin supporters that the ETF approval confirms the cryptocurrency's safety and the following price surge proves its legitimacy. Instead, they compared the recent price rally to a 'dead cat bounce' and the ETF endorsement to 'the naked emperor's new clothes'. Furthermore, they express their concerns about Bitcoin's volatile price cycles leading to potential environmental harm and wealth redistribution, especially affecting less-informed investors.

ECB officials criticized the authorization of ETFs, deeming it a 'misjudgment by authorities' due to a recognized lack of positive societal benefits related to Bitcoin. Bindseil and Schaaf also explained that algorithmic manipulations, Bitcoin's appeal in illegal activities, and regulatory inadequacies contribute to its sustained price performance. They concluded with an emphasis on the need for stronger regulatory interventions for Bitcoin, even suggesting the idea of 'practically forbidding' it.