Cryptocurrencies definitely tried to change the world. Was that a good start? Of course, it was. Some people lost everything, while some managed to gain giant profits. Why did that happen? Well, first of all, you can not predict what might happen with the digital currency that has not become a golden standard in the world. And probably second is that you didn’t have a good friend from the central bank to tell you when to quit. So do not get upset. You can always test your luck by joining the casino online.
You have probably already heard the news that France and Germany have rejected Libra in the European Union in 2018. And many were so outraged by the desire of these countries to defend monetary sovereignty that in their criticism they reached a kind of antithesis. In which the states appear in the person of the Illuminati, holding back technological progress in order to maintain dominance over you, dear friend.
It is long and difficult to talk about cryptocurrency grace or economic chaos that came with the absolute freedom of crypto circulation. Let’s talk about crazy volatility and speculative value, in which a “serious” attempt to compare crypto with the same gold looks infantile. And we also admit that the volume of cryptocurrency trading is largely provided by the gray economy, and the consumer market as such does not exist. Yes, there are drugs, exotics, and private transactions, but the crypt is not interesting to the mass audience.
The Main Problem
The problem with cryptocurrency is product/market fit or our high expectations from it. And the states have not yet managed to prevent the development of libertarian commodity-money relations, because any technology at the beginning of its journey is an elusive wild beast. Look for reasons in the technology itself.
The European Central Bank published on its website a note “Bitcoin’s last stand”, which is an important political statement regarding cryptocurrencies. The main theses are next.
To bitcoin aficionados, the current drop seems to signal a respite on the way to new heights. But it’s more likely that this is the last breath before the road to irrelevance. Bitcoin was created to replace the existing monetary and financial system, but it was rarely used for legal transactions.
Bitcoin does not generate cash flow as real estate or dividends like stocks. It cannot be used productively like commodities or provide social benefits like gold. Therefore, the market valuation of bitcoin is based solely on speculation.
Regulation can be mistaken for approval. Large investors finance lobbyists who defend their interests before legislators and form the belief that space for innovation must be provided at any cost, but this is not the case.
Because bitcoin is neither a payment system nor an investment, it should not be treated as one or the other from a regulatory standpoint and therefore should not be legalized. The promotion of bitcoin carries a reputational risk for banks.
The hint is quiet, isn’t it? Well, I want to emphasize that the ECB voiced something about what was discussed in Europe 3 years ago. They were talking about the lack of product/market fit for the crypt. Europe opposes all cryptocurrencies.
I would like any financial authorities to also pay attention to the position of the ECB. Although in general, the ECB is a so-so role model, heh.