20th October 2024 > > The ECB lets itself down again.

tl;dr

The ECB once again advertises its prejudice to the world.

Market Snap

Market Wrap

The big question this week is whether those outsized flows into the spot BTC ETFs will continue or not. If they are largely due to institutional money, there is no reason to see any slowdown, opening the way to a new ATH sometime soon.

Curious Cryptos’ Commentary – The ECB

The European Central Bank, headed up by the perma-tanned Convicted Criminal Christine Lagarde, has long felt threatened by the invention of Bitcoin. It frequently issues reports and commentary trying to persuade the world that cryptos have no real value. On the 23rd February this year, it put out a piece that made the ridiculous statement “… and (we) reiterate that the fair value of Bitcoin is still zero.” Great, sell me as much as you want if that is the case.

A week or so ago, the ECB was at it again:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4985877

Its conclusion amply demonstrates the internal bias and prejudice that runs through the ECB. Bias and prejudice that arise from its desire to control European citizens by assaulting the concepts of democracy with the creation of a technocratic elite that can never be held to account for its failings, and most certainly cannot be removed at the ballot box.

This is what it has to say:

“… this paper shows that neither poor timing of trades nor holding Bitcoin at all are necessary for impoverishment under a Bitcoin-positive scenario.”

What utter tosh.

…

At “only” twenty-nine pages long the economists at the ECB must be working to rule, not content with their tax-free income, the fattest pensions imaginable, and incredibly large expense budgets that surely cover most of their day-to-day living expenses, work-related or otherwise.

I have tried to wade through the report in detail, but I must admit it’s a daunting task. It is very clear that the conclusion was decided upfront, and that the authors would then go looking for evidence to support that conclusion. For clarity, let me reassure you that I use the word evidence in its broadest sense possible.

…

Two classic and very tired old tropes make an unsurprising appearance.

First up is of course money laundering:

“The payment services view of Bitcoin by Nakamoto has not materialised (but for illicit payments) …”

No mention that the currency and denomination of choice for the distribution of funds gained illicitly in the drugs trade is the EUR 500 note, a prime example of hubris in the “mine is bigger than yours” category.

Then we have the environmental damage claim allied with the money laundering objection:

“Moreover, we assume that Bitcoin has no impact on the economy's production potential. This assumption seems reasonable, or slightly biased to the positive side. Most economists view Bitcoin negatively due to its in their view missing use case, high energy use and association with illicit payments.”

There are obvious attacks on politicians in the US who support cryptos, as well as the belittling of social media influencers, and other celebrities, all of which is underpinned with sneering condescension. There is a certain type of bureaucrat to whom the notion that they do not hold the moral high ground in perpetuity is anathema to them. Some might claim that applies to all bureaucrats, but I couldn’t possibly comment.

In a section discussing the potential price for BTC, by comparing the market cap with gold, equities, and other investments, this startling claim is made:

“While the current market value of a Bitcoin is in the range of USD 50,000-60,000, 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.”

I’ll go with $10mm, thanks very much Lagarde.

I could go on, but I won’t, except to make one final point.

The conclusion rests entirely upon one fallacious assumption which gets a mention above and in the abstract:

“… Bitcoin does not increase the productive potential of the economy …”

And that is where this paper really fails any test of credibility. The economists at the ECB need only read the CCC every day to realise that they have built a mere house of cards.