A recent paper published by the European Central Bank on Oct. 12, 2024, claimed that older Bitcoin BTC
$68,362 holders profit at the expense of newer holders and argued that the scarce decentralized currency should be regulated to prevent its price from rising or outright banned.
The authors claimed that those who acquired BTC at an earlier date, or those who bought at market bottoms, and sold to new investors at a profit were exploiting the newer buyers. This is, of course, how all financial markets work — investors aim to buy assets low and sell high.
From this foundation, the authors concluded that Bitcoin should face strict price controls to prevent exploitation and the ensuing civil strife from this unfair wealth distribution:
“In any case, current non-holders should realize that they have compelling reasons to oppose Bitcoin and advocate for legislation against it, aiming to prevent Bitcoin prices from rising or to see Bitcoin disappear altogether.”
The paper’s authors also asserted that Bitcoin is rarely used as a payment method — while simultaneously citing a false claim made by an earlier research paper that Bitcoin is the preferred method of transaction for criminals. According to a May 2024 report from the United States Treasury Department, fiat cash remains the undisputed king for illicit transactions.
Oddly enough, the paper neglects to mention why the price of the supply-capped asset has dramatically increased since its inception in 2009. The authors likewise fail to mention that Bitcoin’s pseudonymous creator, Satoshi Nakamoto, intended the scarce digital asset to function as both a decentralized method of payment and a store of value against rapidly depreciating fiat currencies.
The multi-trillion dollar fiat debt elephant in the room
The many contradictory claims made in the paper — including that Bitcoin lacks any real-world value, but will subsequently grow to such heights as to destabilize society — neglect the effects of staggering monetary inflation imposed by governments and central banks on their citizens.
According to Statista, public sector debt in the United Kingdom for the 2023-2024 fiscal year has risen to roughly 98% of the country’s gross domestic product — the highest level recorded since the 1960s.
A reference to this monetary and fiscal irresponsibility was included by Satoshi Nakamoto in the Genesis Block — the first block ever mined on the Bitcoin network — in the form of a front-page copy of The London Times dated January 3, 2009.
In the United States, fiscal stimulus through money printing has caused a 41% increase in the M2 money supply since 2020 — adding to the growing $35 trillion national debt and causing a corresponding loss in purchasing power for consumers.
