While Bitcoin may look solid for the time being, it is on the verge of becoming obsolete, according to research by two European Central Bank (ECB) experts.
According to an ECB blog post, Bitcoin is seldom used in transactions and creates a reputational risk for banks, arguing that regulation may be misinterpreted as approval.
“Speculative bubbles rely on new money flowing in. Bitcoin has also repeatedly benefited from waves of new investors. The manipulations by individual exchanges or stablecoin providers etc., during the first waves are well documented, but less so the stabilising factors after the supposed bursting of the bubble in spring,” the blog read.
While some consider this steadiness in the face of several disasters as a sign of optimism, Ulrich Bindseil and Jürgen Schaaf describe it as “an artificially induced last gasp before the road to irrelevance.”
Bitcoin‘s price peaked at $69,000 in November 2021 before plummeting to $17,000 this summer, according to the report’s authors, Bindseil and Schaaf. And it’s mostly fluctuated between $17,000 and $20,000 since the Terra ecosystem collapsed in May and the FTX exchange went bankrupt this month.
At the time of writing, BTC is trading at $16,760.
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