A new European Central Bank (ECB) report has stirred controversy by suggesting that Bitcoin (CRYPTO: BTC) adoption results in a redistribution of wealth from latecomers to early investors.
What Happened: The paper, titled “The distributional consequences of Bitcoin,” contends that even if Bitcoin’s price continues to rise indefinitely, only early adopters would benefit while latecomers and non-holders would suffer significant consequences.
Authors Ulrich Bindseil and Jürgen Schaaf argue that Bitcoin’s original vision as a global payment system has failed, leading to its repositioning as an investment asset.
The economists assert that Bitcoin “does not generate any cash flow (like real estate), interest (like bonds) or dividends (like stocks), cannot be used productively (like commodities).” This makes traditional valuation methods ineffective for Bitcoin.
They argue that Bitcoin’s potential for perpetual price increases, …
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