The Central Bank of Europe is convinced that the value of Bitcoin, the leading digital asset by market cap, is still at zero. The central bank made its position on Bitcoin known in a recent blog post outlining fundamental problems plaguing the Bitcoin ecosystem.
According to the blog post, the EU Central Bank reckons that Bitcoin failed to keep its promise of becoming a global decentralized digital currency and has become instrumental in enabling illegitimate transfers. Despite the recent ETF approvals being regarded by market experts as a major milestone for the community, the bank insists that Bitcoin is unsuitable for investments and payments.
As the blog post reads,
“For disciples, the formal approval [of ETFs] 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.”
In the long term, the bank predicts a major downfall for the asset and its users. Environmental damage and wealth distribution at the expense of less “sophisticated” users are some of the damages that Bitcoin will cause, according to the bank.
Bitcoin’s price value has increased to new yearly highs, with the asset recently exceeding the $64,000 market value for the first time since December 3rd, 2021. Despite the positive collective market sentiment, the central bank maintains that the upsurge is not an indicator of the asset’s sustainability.
The bank points to the lack of fundamental economic data as a factor supporting its position on the asset. Speaking of market capitalization, the bank insists that the metrics only quantified the “overall social damage that will occur when the house of cards collapses.”
Amplifying the collective concerns of Bitcoin critics, the bank claims that the collapse of crypto exchanges in the past and continuous crackdowns from regulators strengthen allegations of market manipulation.
“Manipulation may have become more effective as the trading volumes diminished significantly during the recent market downturn called ”crypto winter” as market interference has more of an impact when liquidity is low.” The bank wrote.
Conclusively, the bank called for authorities to be vigilant and contain money laundering, cyber crimes, and financial losses in the industry.
Bitcoin traded for $62,329 at press time, marking an upward correction from the previous days. The broader cryptocurrency market is also clearing its upsets as total capitalization has reclaimed $2 trillion.