The ECB’s increase in Bitcoin threatens the imbalance of society’s wealth

Economists at the European Central Bank (ECB) have raised the alarm about the potential damage to society from rising Bitcoin prices. They argue that cryptocurrency has transformed into an investment asset from Satoshi Nakamoto's vision of a global payment system.

In a recent paper, ECB economists Ulrich Bindseil and Jürgen Schaff expressed concern that Bitcoin's rising price will primarily benefit early adopters. This trend could eventually cause investors and those who don't hold Bitcoin to face significant economic hardship.

The ECB has called for action on Bitcoin investment awareness

The authors highlight that leaders and celebrities have contributed to Bitcoin's image as an investment with limitless growth potential. Figures like Larry Fink consider Bitcoin primarily a financial asset, detaching it from Nakamoto's original narrative of currency.

However, instead of positioning BTC as a means of payment, these advocates equate it with gold – a scarce resource seen as a long-term investment. This perspective raises questions about the community's motivation for choosing Bitcoin as an investment vehicle. Despite its volatility, proponents expect Bitcoin's value to continue to increase over time while providing a small community service.

“Absolutely speaking, early adopters actually increase their wealth and consumption at the expense of the actual wealth and consumption of those who do not own or invest in bitcoin,” they wrote.

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What's more, the paper warns that early adopters may spend their bitcoin holdings to buy luxury goods, putting latecomers at a disadvantage. This volatility can lead to a redistribution of wealth from new investors to those who first entered the market, exacerbating the poverty of non-owners.

“The consequences of the Bitcoin-as-investment vision of the continuous increase in the price of Bitcoin will be the poverty of the rest of society, unity, stability and finally democracy,” argued economists.

To counter these concerns, Bindseil and Schaff advocate strict price controls on BTC. They argued that this would prevent exploitation and civil unrest caused by unfair distribution of wealth.

He also urged current non-owners to understand the importance of resisting Bitcoin. In addition, unaffiliated people are encouraged to support legislation aimed at curbing or eliminating price gouging altogether.

“The latter and the non-owners and their political representatives need to emphasize that the idea of ​​Bitcoin as an investment is based on redistribution at their expense. Failure to do so will skew the election results towards pro-Bitcoin politicians, imply a redistribution of wealth and fuel societal divisions.”

Meanwhile, the ECB's paper drew heavy criticism from industry experts. Market analyst Tur Demeister warned that the document could encourage governments to impose stricter taxes and restrictions on cryptocurrency. Central bank economists have indicated that they see Bitcoin as an existential threat that must be prevented.

“Many of us have warned that this is coming, with bitcoin as a major political fault line in national and international elections. So here it is. It means we HODLers need to take action to ensure governments respect our basic right to own property,” warned Demeester.

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At the same time, Mark van der Chijs, founder of BTC mining company Hat 8, expressed concern about the ECB's stance. Early adopters should not be vilified for their foresight and willingness to take risks, he argues.

“If bitcoin doubles or triples by 2025, I wouldn't be surprised to see more politicians against BTC and trying to overtax it,” Van der Chijs said.