The European Central Bank contends that Bitcoin has not succeeded in establishing itself as a worldwide digital currency, claiming it holds no true market value.

The European Central Bank ( ECB ) recently criticized Bitcoin in a  blog post , despite the cryptocurrency Bitcoin's recent price surge and growing acceptance among institutions, especially after the authorization of spot trading in the U.S. and the anticipated halving event, do not mean its success. Bitcoin ETFs The ECB firmly opposed the idea that these recent trends signal a win for Bitcoin. Furthermore, the institution criticized Bitcoin for its lack of dividends, cash flow, productivity, and any social value when contrasted with more traditional assets like real estate, stocks, commodities, and gold. They reiterated that Bitcoin has zero net fair value and raised concerns that inexperienced retail investors might be tempted by FOMO.

The ECB highlighted that cryptocurrencies tend to follow a boom-and-bust cycle, posing the risk of serious financial damage.

Moreover, the institution pointed out that Bitcoin is rarely used as a legitimate medium of exchange outside of illegal operations on the dark web, branding it as the 'currency of choice for crime' because of its facilitation of unlawful and terroristic financing. Despite the El Salvador government's efforts to promote Bitcoin as legal tender and provide free satoshis (sats) to its populace, the ECB observed a lack of substantial improvement in Bitcoin's network utilization. booms Bitcoin Continues to Be the Preferred Choice for Money Laundering Activities

The ECB reiterated its long-held critique of Bitcoin's functionality as a currency, emphasizing its restricted use beyond illegal activities online. According to their findings, Bitcoin remains the leading option for laundering money in the digital sphere, with illicit addresses shifting a staggering $23.8 billion in cryptocurrency in 2022, reflecting a 68% rise compared to the previous year.

Almost half of these funds flowed through major exchanges, which while reportedly having compliance protocols, also function as means to convert illegal crypto into cash, the ECB noted.

The ECB expressed discontent with regulatory bodies for their inadequate measures in tackling Bitcoin's detrimental social ramifications, such as its involvement in criminal financing and environmental degradation. They pointed out that regulators have often caved to pressure from lobbyists and social media movements, which might misleadingly suggest that Bitcoin investments are being endorsed. Chainanalysis report The ECB also voiced worries regarding Bitcoin’s environmental footprint, comparing its energy usage to that of entire nations. With rising Bitcoin prices, mining operations are incentivized to consume even more energy, further worsening environmental issues.

Authorities were advised by the ECB to refrain from viewing the price of Bitcoin as a reliable gauge of its sustainability, stressing that there is a glaring absence of fundamental economic data and fair value associated with Bitcoin. They urged the need for protective measures against various risks inherent in Bitcoin, which range from financial losses for inexperienced investors to the darker sides of money laundering.

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