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The European Central Bank (ECB) suggested that early Bitcoin holders are profiting at the expense of new investors and thus they proposed for its control or ban. The bank also voiced concern about Bitcoin creating an imbalance in wealth distribution. The ECB incorrectly assumed Bitcoin as the preferred method for criminals, where recent data showed traditional hard cash is still prominent. The bank also doubts Bitcoin’s real-world value despite its rising value could cause societal upset. This criticism doesn’t consider Bitcoin’s initial objective as a secure digital payment method and a value store against unstable traditional currencies.

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The European Central Bank (ECB) recently published a paper suggesting that long-time Bitcoin holders are making profits at the expense of newbies who just entered. They are suggesting that actions should be taken to either control Bitcoin’s price or ban it entirely.

At the core of their argument, the ECB authors believe that people who got into Bitcoin early or those who buy low and sell high are exploiting new investors. Interestingly, it’s a standard practice in any financial scenario, buy low and sell high.

They also go on arguing that Bitcoin poses some significant imbalance in wealth distribution leading to potential strife and should therefore be heavily regulated or even banned:

“Non-holders should oppose Bitcoin and push legislation against it to either stop its prices from rising or completely eliminate it.”

The authors also criticized Bitcoin’s limited use as a means of payment while falsely stating that it’s the number one choice for criminals. Contrary to this, a May 2024 report from the US Treasury Department showed that good old hard cash remains the top choice for dodgy transactions.

Interestingly, in their long drawn-out critique of Bitcoin, the authors conveniently forget to mention why Bitcoin’s price has spiked since its birth in 2009, or the fact that its creator, Satoshi Nakamoto, intended it to be a secure digital payment method and a value store against wobbly traditional currencies.

The paper also raises eyebrows when it suggests that Bitcoin has no real-world value while fearing that it might grow so much as to cause societal upset. This comes off as contradictory, given how governments and central banks have overstretched themselves with unsustainable levels of debt.

For instance, the UK’s public debt for the fiscal year 2023-2024 equals about 98% of the country’s GDP, the highest level since the 60s. Meanwhile, in the US, fiscal stimulus through money printing has added 41% to the M2 money supply since 2020, pushing the country’s national debt up to a staggering $35 trillion and devaluing the purchasing power.

In conclusion, like any innovative and disruptive technology, Bitcoin has its critics and proponents, but the reality of its value and potential impact is far more nuanced than what’s highlighted in the ECB paper.

Source: Cointelegraph