European Central Bank Claims Early Bitcoin Investors Exploit New Buyers
A recent report by the European Central Bank, or ECB, reported that early BTC investors are taking other new buyers for a ride. This paper justifies that the decentralized nature of Bitcoin and the limited supply structure have resulted in creating an environment in which the early movers profit a great deal by selling at a profit as more and more people join the fray.
Bitcoin’s Wealth Transfer Problem
According to the report by the ECB, the value structure of BTC leads to an “unfair” wealth transfer in which early investors capitalize at the expense of newer market participants. Possible solutions to that problem could be strict price controls or even a ban on BTC, the authors say.
Possible Social Unrest
The ECB report is also concerned with regards to the possibility of social unrest surrounding BTC wealth distribution. The paper claims that non-holders will increasingly oppose Bitcoin and advocate legislation to prevent its price from rising, or to ban it altogether .
Bitcoin and Criminal Activity
The report also points out that BTC may have some involvement in criminal activities, which is somewhat controversial. Because, as it were suggested by a recent report from the U.S. Department of the Treasury, the first vehicle of illicit activity is fiat currency and not cryptocurrencies, including BTC.
Ignoring the Inflationary Hedge of BTC
Critics also believe that the ECB report avoids the real value of Bitcoin as an inflation hedge: its supply is capped, an attribute particularly opposed to the expansionary monetary policies, hence increasing national debts across borders and leaving a great chance for BTC to become viable protection against fiat currency devaluation.
Interest in Bitcoin Investments Widens
Growing interest in BTC continues to quash concerns. In fact, as evidenced by a recent survey conducted by Charles Schwab, US investors increasingly have an interest in cryptocurrency ETFs-US investors plan to invest in crypto via ETFs in the next year 45%, while millennials are quite enthusiastic about Bitcoin-62% of millennial ETF investors plan to commit money to cryptocurrency in the coming year.
However, the report started fresh debates on BTC future, but the demand for digital assets points out that interest in Bitcoin is only growing despite institutional skepticism.
