ECB policymakers made an unexpected statement on cryptocurrency. From their viewpoint, Bitcoin’s fair value equals zero. How come? The flagship crypto has gained worldwide recognition as a leading investment instrument in the crypto market. Such a sharp reversal in the ECB’s rhetoric came as a bombshell.
Ulrich Bindseil, Director General of Market Infrastructure and Payments, and Jürgen Schaaf, a senior advisor to the Management of Market Infrastructure and Payments, expressed skepticism about the most popular cryptocurrency despite Bitcoin’s rapid rally triggered by the approval of spot Bitcoin ETFs in the US.
They reckon that cryptocurrency is not the best choice to invest personal savings in. The ECB officials also criticized Bitcoin as a payment means. Ulrich Bindseil and Jürgen Schaaf referred to El Salvador where Bitcoin did not gain popularity despite its approval as legal tender. The ECB economists explained that Bitcoin has no merit for investors because it does not generate extra income as real estate or dividends as securities.
In January 2024, the US Securities and Exchange Commission greenlighted the launch of the new exchange instrument, a spot Bitcoin ETF. Commenting on this decision, some ECB officials said that such approval encouraged crypto fans and confirmed the safety of crypto assets. However, Ulrich Bindseil and Jürgen Schaaf do not share this standpoint.
Nevertheless, the number one crypto perked up and has been developing a stunning rally since then. In late February, the coin surpassed the $50,000 landmark for the first time since the end of 2021. Experts say that the flagship crypto has been soaring due to uncertainty in the global economy. On the back of geopolitical jitters, investors are shifting focus to digital assets because gold and the US dollar no longer perform as a hedge against high inflation and economic upheavals. No wonder, after the permission was granted to launch Bitcoin-related ETFs, they aroused buoyant demand.
