In a blog post on Thursday, two officials of the European Central Bank (ECB) stated that Bitcoin’s fair value is still zero despite the exchange-traded fund (ETF) approval by the Securities and Exchange Commission (SEC) in January.
“On 10 January, the US Securities and Exchange Commission (SEC) approved spot exchange-traded funds (ETFs) for Bitcoin. 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,” the two officials stated.
Despite accepting that Bitcoin bounced back from $17,000 to $52,000 in a few months, the ECB still had demeaning words for the digital asset, alleging that Bitcoin’s proposed use case was all facade and purely deceptive. It also captioned the approved Bitcoin ETF “the naked emperor’s new clothes.”
Why Is the Dead Cat Bouncing So Hard?
The ECB seemed disturbed about why Bitcoin was pumping so hard but found reasons to justify the recent rally. The two officials cited that the rally was sponsored by the recently approved spot Bitcoin ETF, which gave institutions access to cryptocurrencies.
According to the post, the interest rate cut by the Federal Reserve System (Fed) also pulled Wall Street to Bitcoin. The officials noted that lower rates increased investor’s appetite to diversify their portfolios.
However, the ECB stated that the pump was temporary and that “prices will eventually return to fundamental values in the long run.” The two officials gave three reasons Bitcoin would return to zero, and they are: The Bitcoin price was manipulated from the beginning, it was a currency for criminals, and authorities generally misjudged the currency.
Reactions Followed
The ECB got community notes in reaction to its post that Bitcoin had no value. Among the replies were comments, accompanied by links showing how Bitcoin was nothing like all the ECB stated.
The comments stated:
- BTC is not preferable for criminals, fiat, like €/$, is
- Bitcoin is an open monetary protocol and a decentralized store of value
- The euro is losing its purchasing power against Bitcoin constantly
- Bitcoin is good for the environment.
The ECB wrote a similar post last year when FTX imploded, causing a broader market capitulation.
