ECB officials are urging Bitcoin laggards and non-holders to oppose Bitcoin and advocate for legislation against it.

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Those who have been late to Bitcoin or who do not own the coin have good reason to oppose it and advocate legislation to protect against its negative consequences on wealth redistribution, according to a recent report. analysis written by ECB officials Ulrich Bindseil and Jürgen Schaff.

The authors, who said the February Bitcoin price rally was driven by price manipulation A previous report claimed that Bitcoin had moved from its initial vision as a decentralized payment system to primarily an investment asset.

This argument is supported by the growing support for Bitcoin from high-profile figures like Larry Fink, CEO of BlackRock, or Mike Novogratz, founder of Galaxy Digital, who view Bitcoin as a pure investment asset. Their view is that Bitcoin’s limited supply and growing demand will cause its price to rise, similar to gold.

However, ECB officials say Bitcoin’s limited supply does not guarantee sustainable price increases, contrary to popular belief among crypto supporters.

“There are countless assets on earth whose supply is limited or finite, and for none of them is the idea that they can support an ever-increasing valuation over the long term, regardless of the services or benefits that they provide to society, is not particularly plausible. » specifies the report.

“Supporters of the Bitcoin investment perspective ignore the fact that “scarcity” describes the relationship between supply and demand. A limited and finite supply is not synonymous with shortage. In the context of Bitcoin with its limited and fixed supply, the non-economic term “scarcity” seems more appropriate. If supply is fixed, the price becomes exclusively dependent on demand. And if demand were to disappear, the price would be zero,” it says.

The authors warn that even in a scenario where the value of Bitcoin continues to rise, this could lead to negative economic consequences if the underlying fundamentals do not justify it. They argue that Bitcoin does not improve the productive capacity of the economy and that any wealth generated by Bitcoin holders comes at the expense of other members of society.

“This redistribution of wealth and purchasing power is unlikely to occur without harmful consequences for society,” the report states.

“Early adopters have a vested interest in promoting Bitcoin values ​​in order to redistribute wealth and consumption from latecomers to themselves, perhaps without being aware of the redistributive nature of their vision,” he says.

“In any case, current non-holders should understand that they have compelling reasons to oppose Bitcoin and advocate for legislation against it, aimed at preventing Bitcoin prices from rising or to see Bitcoin disappear completely. Laggards and non-holders and their political representatives should emphasize that the idea of ​​Bitcoin as an investment is based on redistribution at their expense,” he adds.

The authors also warn that failure to do so could lead to electoral results favorable to politicians who support pro-Bitcoin policies, which could exacerbate wealth inequality and societal divisions by promoting a system that benefits early adopters while disadvantaging latecomers and non-holders.

Is the ECB declaring war on Bitcoin?

This is not the first time that ECB officials have expressed skepticism towards Bitcoin. As Crypto Briefing reported, ECB officials had previously likened the approval of US Bitcoin ETFs to “the naked emperor’s new clothes.”

The ECB faced a social backlash as soon as the document surfaced. Wall Street veteran Max Keizer criticized the paper for making false claims about Bitcoin’s original purpose.

THE @BCE made a rookie mistake in claiming that Bitcoin originated as a means of payment. This is false. The word “Cash” in the White Paper refers to money, such as gold, and not fiat currency. Bitcoin has always been digital gold.

Satoshi clarifies this in subsequent posts and messages. pic.twitter.com/qEMhoNDWpE

-Max Keizer (@maxkeizer) October 19, 2024

Blockstream advisor Tuur Demeester, who first brought the document to public attention, believes the ECB document is “a veritable declaration of war” and that authorities will use it to justify taxes severe restrictions or bans on Bitcoin.

Demeester warns that the document could have serious consequences for Bitcoin and its supporters, urging holders to take steps to protect the rights of individuals to hold Bitcoin.

1/ This new document is a real declaration of war: the ECB affirms that from the start #bitcoin adopters steal economic value from laggards. I firmly believe that the authorities will use this ridiculous argument to enact harsh taxes or bans. Check 🧵 why: pic.twitter.com/qg31YenTSC

– Tuur Demeester (@TuurDemeester) October 19, 2024

Following critical remarks from the ECB in February, Bitcoin set a new record high in mid-March. After the rally, Bitcoin saw price corrections but remains strong above $45,000.

Bitcoin is currently trading at around $68,100, up more than 60% year to date, according to TradingView.

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