ECB officials urge newcomers and non-Bitcoin holders to oppose Bitcoin and advocate for legislation against it.

Key takeaways

  • ECB officials argue that the rise of Bitcoin redistributes wealth from newcomers to early adopters.
  • The report urges non-holders to advocate for anti-Bitcoin legislation to protect their wealth.

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Those who have come late to Bitcoin or do not own the currency have good reason to oppose it and advocate for legislation to protect themselves from its negative wealth redistribution consequences, according to a recent analysis written by ECB officials Ulrich Bindseil and Jürgen Schaff.

The authors, who said that the Bitcoin price rally in February was driven by price manipulation In a previous report, it is stated that Bitcoin has moved from its original vision as a decentralized payment system to primarily an investment asset.

The argument is supported by growing support for Bitcoin from high-profile figures such as BlackRock CEO Larry Fink or Galaxy Digital founder Mike Novogratz, who see Bitcoin as a pure investment asset. Their perspective is that Bitcoin’s limited supply and growing demand will drive its price up, similar to gold.

However, ECB officials claim that Bitcoin’s limited supply does not guarantee sustained price increases, contrary to popular belief among cryptocurrency supporters.

“There are countless assets on Earth with limited or finite supply, and for none of them the notion that they can sustain increasing valuation over the long term, regardless of the services or benefits they provide to society, is particularly plausible. ”the report states.

“Proponents of the Bitcoin investment perspective ignore the fact that “scarcity” describes the relationship between supply and demand. A limited and finite supply does not equal scarcity. In the context of Bitcoin with its limited and fixed supply, the non-economic term “rarity” seems more appropriate. If the supply is fixed, the price depends exclusively on demand. And if demand disappeared, the price would be zero,” he says.

The authors warn that even in a scenario where Bitcoin’s value continues to rise, it could have negative economic consequences if not justified by the underlying fundamentals. They argue that Bitcoin does not improve the productive capacity of the economy and that any wealth generated by Bitcoin holders comes at the expense of other members of society.

“This redistribution of wealth and purchasing power is unlikely to occur without detrimental consequences for society,” the report states.

“Early adopters have a vested interest in promoting Bitcoin values ​​to redistribute wealth and consumption from newcomers to themselves, perhaps without being aware of the redistributive nature of their vision,” he says.

“In any case, current non-holders must realize that they have compelling reasons to oppose Bitcoin and advocate for legislation against it, with the goal of preventing Bitcoin prices from rising or Bitcoin from disappearing entirely. “Newcomers and non-holders and their political representatives should emphasize that the idea of ​​​​Bitcoin as an investment is based on redistribution at their expense,” he adds.

The authors also warn that failure to do so could lead to election results that favor politicians who support pro-Bitcoin policies, which could exacerbate wealth inequality and social divisions by promoting a system that benefits early adopters and at the same time disadvantage newcomers and non-possessors.

Is the ECB declaring war on Bitcoin?

It is not the first time that ECB officials have shown their skepticism towards Bitcoin. As crypto report reportedECB officials previously compared the approval of US Bitcoin ETFs to the “naked emperor’s new clothes.”

The ECB faced a social backlash as soon as the document appeared. Wall Street veteran Max Keizer criticized the newspaper for making false claims about Bitcoin’s original purpose.

Blockstream advisor Tuur Demeester, who first brought the document to public attention, believes that the ECB document is “a real declaration of war” and that authorities will use it to justify severe taxes or bans on Bitcoin .

Demeester warns that the document could have serious consequences for Bitcoin and its supporters, and urges holders to take action to protect people’s rights to own Bitcoin.

Following critical comments from the ECB in February, Bitcoin set a new record in mid-March. After the rally, Bitcoin saw price corrections but remains solid above $45,000.

Bitcoin is currently trading at around $68,100, up more than 60% so far this year. by TradingView.

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