ECB Officials Tell Bitcoin Non-Holders to Oppose It Legally

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Those who either arrived late to the Bitcoin phenomenon or lack ownership of the cryptocurrency have valid grounds to contest its legitimacy and promote legislative measures to shield themselves from its detrimental impacts on wealth distribution, as highlighted in a recent study by ECB officials Ulrich Bindseil and Jürgen Schaff.

The writers have previously claimed that Bitcoin’s dramatic price surge in February was resulting from market manipulation, asserting that the cryptocurrency has diverged from its initial purpose as a decentralized payment method to being viewed mainly as an investment vehicle.

Support for this argument is bolstered by endorsements from prominent figures such as BlackRock’s CEO Larry Fink and Galaxy Digital’s founder Mike Novogratz, who regard Bitcoin as a straightforward investment asset. They argue that Bitcoin’s finite availability and increasing demand will elevate its market value, akin to precious metals like gold.

Nevertheless, ECB officials contend that Bitcoin’s limited availability does not ensure continuous price appreciation, which contrasts with the assumptions held by many cryptocurrency advocates.

“Countless assets on the planet have limited or finite availability, yet it is highly implausible for any of them to maintain an ever-increasing valuation over time, irrespective of the services or advantages they provide to society,” the report points out.

“Supporters of the investment viewpoint on Bitcoin overlook the reality that ‘scarcity’ describes the interplay between supply and demand. A limited, fixed supply does not equate to viewing it as scarce. Regarding Bitcoin, with its finite supply, the non-economic term ‘rarity’ appears more suitable. Should the supply remain static, the value will rely solely on demand. If demand were to vanish, the price would plummet to zero,” it warns.

The authors caution that even if Bitcoin’s price were to keep escalating, it might provoke adverse economic effects if such trends are not underpinned by actual economic fundamentals. They assert that Bitcoin fails to bolster the economy’s productive potential and that the wealth created for Bitcoin holders does so at the cost of others in society.

“This transfer of wealth and purchasing power will likely carry significant negative repercussions for society,” asserts the report.

“Early adopters have a strong incentive to promote Bitcoin principles to shift wealth and consumption from newcomers to themselves, potentially without realizing the redistributive nature of their aspirations,” it highlights.

“In any case, individuals without Bitcoin should understand that they have robust reasons to resist Bitcoin and advocate for legal measures against it, with the goal of halting the increase of Bitcoin’s value or seeing its eventual cessation. Newcomers and non-holders, along with their political representatives, should stress that framing Bitcoin as an investment is rooted in appropriating wealth from their interests,” it concludes.

The authors also forewarn that neglecting to do so could result in favorable electoral outcomes for politicians who back pro-Bitcoin policies, possibly exacerbating wealth disparity and social fractions by endorsing a framework that favors early adopters while disadvantaging newer participants and non-holders.

Is the ECB waging war on Bitcoin?

This is not the first instance of ECB officials demonstrating skepticism towards Bitcoin. As documented by Crypto Briefing, they previously compared the endorsement of Bitcoin ETFs in the US to the tale of the ‘Naked Emperor’s New Clothes.’

The ECB encountered public backlash soon after the report was released. Wall Street veteran Max Keiser denounced the document for misrepresenting the original intent of Bitcoin.

The @ecb makes an elementary error by asserting that Bitcoin emerged as a payment medium. This is incorrect. The term ‘Cash’ in the White Paper refers to money, akin to Gold, not fiat currency. Bitcoin has eternally represented digital Gold.

Satoshi elucidates this in subsequent communications and messages. pic.twitter.com/qEMhoNDWpE

— Max Keiser (@maxkeiser) October 19, 2024

Blockstream consultant Tuur Demeester, the individual who initially highlighted the paper, posits that the ECB’s document represents “a genuine declaration of war” and predicts that authorities will leverage it to impose stringent taxes or restrictions on Bitcoin.

Demeester cautions that the implications of the paper could be severe for Bitcoin and its advocates, urging holders to take measures to safeguard individuals’ rights to possess Bitcoin.

1/ This fresh report serves as a true declaration of war: the ECB claims that early #bitcoin adopters are robbing economic value from latecomers. I sincerely believe that authorities will harness this luddite reasoning to implement punitive taxes or bans. Check the for further details: pic.twitter.com/qg31YenTSC

— Tuur Demeester (@TuurDemeester) October 19, 2024

Following critical comments from the ECB in February, Bitcoin reached a new peak in mid-March. After this surge, the cryptocurrency saw some retracement but has stabilized firmly above $45,000.

Currently, Bitcoin is trading at approximately $68,100, reflecting over a 60% increase year-to-date, according to TradingView.