ECB’s Disparaging Comments on Bitcoin Draw the Ire of Crypto Community
On February 22, the European Central Bank (ECB) described Bitcoin as a ‘dead cat’ and criticized its use in criminal activities on the darknet. These remarks have ignited a backlash from the crypto community, questioning the ECB’s stance and credibility.
In Ulrich Bindseil’s and Jürgen Schaaf’s blog post, the European Apex bank criticized Bitcoin for failing to fulfill its original promise as a global decentralized digital currency. The ECB argued that Bitcoin has not gained mainstream adoption and enjoys limited legitimate use cases.
Bitcoin has failed to become a global decentralised digital currency, instead falling victim to fraud and manipulation.
The recent approval of an ETF doesn’t change the fact that Bitcoin is costly, slow and inconvenient, argues #TheECBBloghttps://t.co/e9Ek01Dism pic.twitter.com/ddBFsv4g0w
— European Central Bank (@ecb) February 22, 2024
The European institution also touched on Bitcoin mining. It noted that transaction validation on the network contributes to environmental damage due to its reliance on the proof-of-work (PoW) consensus mechanism.
The ECB stated that the energy demands of the PoW network are on the same scale as some small countries. Higher Bitcoin prices imply higher power consumption as miners scramble to solve the inherent cryptographic puzzles.
Furthermore, the financial agency noted that Bitcoin is not a suitable investment vehicle as it does not offer ready cash flow for easy liquidity access. It implied that the Bitcoin price is largely driven by fear of missing out (FOMO) initiated by less knowledgeable retail investors who often jump on the crypto bandwagon.
The ECB added that these compelling reasons made it question the validity of the US Securities and Exchange
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