Officials of the European Central Bank (ECB) are not convinced that Bitcoin (BTC) is a valuable financial asset despite the US approval of a spot exchange-traded fund (ETF) for the flagship cryptocurrency.
The ECB is the central bank of European Union (EU) countries that use the euro as their currency.
In a new blog post, ECB advisor Jürgen Schaaf and Ulrich Bindseil, the bank’s director general of market infrastructure and payments, say the U.S. Securities and Exchange Commission’s (SEC) decision to greenlight Bitcoin spot ETF applications on January 10th does not change the fact that the crypto asset is not a suitable means of payment or investment.
“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.”
Bindseil and Schaaf argue that Bitcoin is hardly used for payment, except by criminals who use it for their illicit transactions.
“Bitcoin transactions are still inconvenient, slow, and costly. Outside the darknet, the hidden part of the internet used for criminal activities, it is hardly used for payments at all.”
They also argue that Bitcoin is not a good investment and warn that mining the cryptocurrency continues to cause massive environmental pollution.
“It does not generate any cash flow (unlike real estate) or dividends (stocks), cannot be used productively (commodities), and offers no social benefit (gold jewelry) or subjective appreciation based on outstanding abilities (works of art).
The mining of Bitcoin using the proof of work mechanism continues to pollute the environment on the same scale as entire countries, with higher Bitcoin prices implying higher energy consumption as higher costs can be covered by miners.”
Venture capitalist and former Coinbase CTO Balaji Srinivasan responds to the statements by sharing a long-term chart of the BTC/EUR pair on social media platform X.
“The Euro has collapsed against Bitcoin.”
BTC is worth $51,105 at time of writing.
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