As a seasoned crypto investor with over two decades of experience navigating various financial markets, I find the recent anti-Bitcoin tirade by Jürgen Schaaf, advisor to the Senior Management of the Market Infrastructure and payments business area of the ECB, to be nothing more than a desperate attempt to preserve the status quo.
In an October 20th post, I, as an analyst, noted that Jurgen Schaaf, advisor to the Senior Management of the Market Infrastructure and Payments department at the European Central Bank (ECB), described Bitcoin as a speculative bubble destined to pop.
He argued that it could result in significant societal harm, given its heavy energy consumption and ability to facilitate illegal transactions.
As an analyst, I’ve been reflecting on a recent argument against Bitcoin that stems from a paper published by the European Central Bank, which I had the opportunity to collaborate on last week. This paper suggests that over the long term, Bitcoin holders are inadvertently making newer market participants financially worse off.
Central Bank Bitcoin Tirade
Schaaf stated that, regardless of whether Bitcoin prices continue to increase without a bursting of the bubble, the profits made by early adopters could potentially be gained at the cost of those who join later or do not own any.
This leads to “significant redistribution effects,” he added before making an even wilder claim:
Initially, the affluence and spending habits of those who possess Bitcoin increase, whereas others experience a decline in their financial status, irrespective of whether they have any involvement with Bitcoin.
Additionally, he argued that such wealth redistribution might lead to social unrest, as people who join the system later may experience dissatisfaction as their buying ability decreases over time.
The central bank adviser’s solution was simple: eliminate Bitcoin.
People who don’t own Bitcoins might want to understand that its value increase could be due to wealth shifting away from them. It’s worth considering policies aimed at limiting Bitcoin’s expansion, or possibly phasing it out entirely.
In democratic systems, the use of Bitcoin might impact election results. Pro-cryptocurrency candidates could receive backing from early adopters, potentially tilting the balance towards policies detrimental to those who don’t own cryptocurrencies.
— Jürgen Schaaf (@schaaf_jurgen) October 20, 2024
In a recent discussion, Steven Smith, the CEO of Celestial Minining Management, effectively presented an opposing viewpoint, suggesting that it’s the last-minute buyers and sellers who ultimately set the value of Bitcoin.
The main idea here is to avoid bureaucrats making empty speeches, imposing their decisions on others, and interfering unnecessarily, all in the name of perceived fairness or goodness.
He added that simple properties such as this make BTC so valuable that a sufficient portion of humanity will choose to store their wealth in it “as opposed to other instruments which people like you [central banks] directly or indirectly control through the debt-money systems.”
Why Central Banks Hate Bitcoin
In simpler terms, traditional central banks manage loans and currency values, but decentralized assets that aren’t controlled by any central authority could potentially pose a significant challenge to their authority.
Additionally, the European Central Bank is advocating for a central bank digital currency (CBDC), which they call a “programmable digital euro.” This currency would be tightly regulated and intended solely for transactional purposes, such as making payments, but not for investment or hoarding.
The United States Federal Reserve Bank of Minneapolis suggested something similar in a paper last week. Bitcoin should be taxed or banned because it prevents the government from effectively managing its debts through “permanent deficits,” it claimed.
Essentially, when central banks print money and governments adopt uncertain spending strategies, these actions can lead to inflationary periods and a slow decrease in the value of traditional paper currencies, ultimately affecting people’s purchasing power negatively. In contrast, Bitcoin is not subject to such influences because it operates independently from any central authority or government.
Read More
- W PREDICTION. W cryptocurrency
- AAVE PREDICTION. AAVE cryptocurrency
- PENDLE PREDICTION. PENDLE cryptocurrency
- ZETA PREDICTION. ZETA cryptocurrency
- FutureNet Co-Founder Roman Ziemian Arrested in Montenegro Over $21M Theft
- AEVO PREDICTION. AEVO cryptocurrency
- SUKU PREDICTION. SUKU cryptocurrency
- MXC PREDICTION. MXC cryptocurrency
- BTC EUR PREDICTION. BTC cryptocurrency
- REN PREDICTION. REN cryptocurrency
2024-10-21 09:45