ECB officials liken crypto regulation to providing new clothes for a 'naked emperor'
In a blog post published by the European Central Bank, Ulrich Bindseil, director general of market infrastructure and payments and Jürgen Schaaf, an advisor to the central bank, say that for bitcoin lobbyists the formal approval by the SEC confirms that Bitcoin investments are safe and the preceding rally is proof of an unstoppable triumph.
In the mid-2010s, the hope that bitcoin's value would inevitably rise to ever new heights began to dominate the narrative. But bitcoin is neither suitable as an investment or even as a real-world means of payments, the blog argues.
Bindseil and Schaff believe that lower interest rates and the SEC green light have opened the floodgates to Wall Street for bitcoin, promising large inflows of funds, "the only effective fuel in a speculative bubble".
"While in the short run the inflowing money can have a large impact on prices irrespective of fundamentals, prices will eventually return to their fundamental values in the long run," states the post. "And without any cash flow or other returns, the fair value of an asset is zero.
Detached from economic fundamentals every price is equally (im)plausible - a fantastic condition for snake oil salesmen."
In a previous blog post in November last year, Bindseil and Schaaf, urged lawmakers to shy away from regulatory measures, pointing out that big bitcoin investors have the strongest incentives to keep the euphoria going and have hired armies of lobbyists to push their case with lawmakers and regulators.
In their latest post on the issue, the authors state: "While the current rally is fuelled by temporary factors, there are three structural reasons that may explain its seeming resilience: the ongoing manipulation of the 'price' in an
