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Key Words: Bitcoin is on ‘the road to irrelevance,’ ECB says

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For bitcoin proponents, the seeming stabilization signals a breather on the way to new heights. More likely, however, it is an artificially induced last gasp before the road to irrelevance.

That was Ulrich Bindseil, director general, and advisor Jürgen Schaaf from the European Central Bank, lambasting the bitcoin market in a scathing blog published on Wednesday.

The blog, named “Bitcoin’s last stand”, said the fluctuation and stabilization of bitcoin’s price
BTCUSD,
+2.52%

recently was “already foreseeable” before crypto exchanged FTX collapsed earlier this month, sending the coin’s price down to below $16,000.

The authors criticized bitcoin’s usage, saying it is “questionable” as a means for payment.

“Real bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant extent for legal real-world transactions,” they said.

Bindseil and Schaaf said the cryptocurrency isn’t even suitable as an investment and called the market valuation of bitcoin based “purely on speculation.”

“It does not generate cash flow (like real estate) or dividends (like equities), cannot be used productively (like commodities) or provide social benefits (like gold),” they explained.

They also wrote that regulation in the crypto world can sometimes be misunderstood as approval, adding that regulation is “partly shaped” by misconceptions.

“The use of a promising technology is not a sufficient condition for an added value of a product based on it,” Bindseil and Schaaf added.

They also pointed out the pollution that bitcoin mining generates. They estimate bitcoin mining consumes as much electricity per year comparable to the entire country of Austria.

Crypto traders reacted to the blog on Twitter with bullish views on bitcoin, and more bearish views on the ECB.

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