ECB: Bitcoin is on the «road to irrelevance»

ECB representatives are confident that bitcoin is on the verge of losing relevance, and signs of this were visible even before the collapse of the FTX. 

Economists note that bitcoin approached a dead end even before the collapse of FTX, because its technological capabilities are extremely questionable, and transactions using it are slow. 

Today, the bitcoin exchange rate paired with the US dollar has risen sharply from $16,703 to $17,335. However, the ECB considers this jump an «artificially induced last gasp before the road to irrelevance». Recently, the price of BTC has fluctuated around $20 thousand after falling earlier this year to $17 thousand from an annual maximum of $69 thousand.

Analysts believe that bitcoin's ambiguous reputation is based on the fact that this cryptocurrency is mostly not used for legal purposes in the real world. Also, bitcoin is not suitable as an investment (since it does not generate cash flow or dividends), cannot be used as productively as commodities, and does not have social advantages like gold. The price of bitcoin depends solely on speculation and is fueled by hype from large investors and lobbyists.

At the end of 2020, when bitcoin reached its historical maximum, individual companies began to promote this cryptocurrency at the corporate expense. Today, some venture capital firms are still investing heavily in bitcoin. However, the ECB is confident that bitcoin, although it is the world's largest cryptocurrency by market capitalization, still poses a risk to the reputation of banks.