$10M per BTC is plausible, ECB economists say and urge a ban

Two economists at the European Central Bank (ECB) have published a new paper criticizing bitcoin (BTC) technology while admitting that not investing in BTC could be "a lost opportunity for wealth accumulation." Despite this, they continue to call for legislation against it.

This time, the primary argument highlighted by industry observers is that, according to the authors, investing in BTC impoverishes and harms society.

"This redistribution of wealth and purchasing power is unlikely to occur without detrimental consequences for society. Even if latecomers cannot attribute their loss of purchasing power, they will feel a sense of malaise and frustration, which will further contribute to an increasingly divided society," Ulrich Bindseil and Jürgen Schaaf wrote.

They reiterated their previous stance that BTC lacks "a stable intrinsic anchor," while also noting that "it could be argued that any price for bitcoin is equally plausible, including $10 million or more – as none of these prices has any particular economic justification or imputed basis."

They also claim that the price of BTC "is heavily influenced by government attitudes and actions" and that politicians' positions on bitcoin could sway election outcomes. Bitcoin, along with the broader crypto industry, has become a significant topic in the US presidential elections, where Republican candidate Donald Trump has emerged as a strong advocate for bitcoin.

Trump and his family later ventured into their own decentralized finance (DeFi) project, World Liberty Financial, which has so far been unsuccessful in selling its token.

In any case, Bindseil and Schaaf urge current non-holders of BTC to recognize that they have "compelling reasons to oppose bitcoin and advocate for legislation against it." The goal, they suggest, would be to prevent BTC's rise or "to see bitcoin disappear altogether."

In November 2022, Bindseil and Schaaf published the infamous piece Bitcoin’s Last Stand, which was criticized by bitcoin advocates for its inaccuracies and misinformation. Nonetheless, since its publication, BTC’s price has risen more than 300%.

Meanwhile, bitcoin proponents were quick to defend the technology and its ecosystem.

"If central banks are worried about the effects of global wealth moving into bitcoin, they should cease diluting their own currencies and offer a more competitive product," said Tom Honzik, a bitcoin educator at Unchained, a bitcoin financial services company.

Economist Rahim Taghizadegan noted that the ECB might as well blame the Swiss Franc for its appreciation.

"Isn't it unfair to non-Swiss? Alas, the (Swiss National Bank) does everything in its power to depreciate the Franc but just can't keep up with the (euro)," the economist concluded.