The European Central Bank (ECB) claims that Bitcoin’s continuously rising price benefits only early investors, leaving new users at a disadvantage, potentially threatening economic stability and democracy. This statement comes from a report by ECB economists Ulrich Bindseil and Jürgen Schaaf.

According to the document, Bitcoin’s original goal as an international payment system has failed, leading to its repositioning as an investment asset. However, the report emphasizes that late Bitcoin adopters may not see significant benefits and could face losses even without a “bursting bubble.”

“The new Lamborghinis, Rolexes, and villas of early Bitcoin investors are financed at the expense of reduced consumption and wealth of those who joined the market later,” the report states.

Such wealth redistribution, the economists added, could have negative societal consequences.

Early Bitcoin supporter Tuur Demeester criticized the ECB report, calling it a declaration of war against the crypto industry.

1/ This new paper is a true declaration of war: the ECB claims that early #bitcoin adopters steal economic value from latecomers. I strongly believe authorities will use this luddite argument to enact harsh taxes or bans. Check 🧵 for why: pic.twitter.com/qg31YenTSC
— Tuur Demeester (@TuurDemeester) October 19, 2024

“This is the most aggressive article from authorities I’ve seen in all my years in the industry,” Demeester wrote.

He warned that the arguments from the report could be used to impose heavy taxes or outright bans on cryptocurrencies.

Previously

ECB President Christine Lagarde admitted in November 2023 that her son lost almost all of his cryptocurrency investments despite her warnings. In February 2024, ECB experts reiterated their view that Bitcoin is an asset with “zero value,” even after the launch of spot Bitcoin ETFs in the US.

Notably, Tuur Demeester previously predicted that Bitcoin’s price could rise to $600,000 by 2026.