The European Central Bank has a pretty clear message about the No. 1 virtual currency in the world: not our problem.
In what appears to be a general service note on its website, the ECB outlines all the most nagging issues that bitcoin
BTCUSD, -2.86%
harbors, according to the central bank, notably focusing on its use as a highly speculative asset and its flaws as a legitimate currency.
“Bitcoin is a speculative asset. In other words, it is something that you can gamble on to make a profit, but with a risk that you will lose your investment,” the central bank concludes. It also says regulating or restricting the nascent crypto market doesn’t fall under its remit.
The ECB’s critique of the digital asset comes after it surged to a peak of about $20,000 in late December amid a fervor for virtual assets of all stripes, pushing the total value of cryptocurrencies to an all-time high around $830 billion in early January, according to data site CoinMarketCap.com, before shedding about half that value. The value of a single bitcoin presently sits at around $8,500, representing a 58% since its peak, according to news and data site CoinDesk.
That said, bitcoin has been treading water—if not tilting somewhat higher—and still boasts a return of about 780% since its nadir at the end of December 2016. That compares with a 24% return for the Dow Jones Industrial Average
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and an 18% gain for the S&P 500 index
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over the same period.
The ECB’s graphic might best sum up some of bitcoin’s flaws:
Source: European Central Bank