Bitcoin has surged by nearly 170% since the European Central Bank (ECB) ominously warned of its impending "irrelevance," defying economists' predictions and leaving many in the financial world reassessing their stance on the cryptocurrency.
ECB's Warning Meets Bitcoin's Resilience
In November 2022, the ECB published a blog post predicting a bleak future for Bitcoin, particularly in the wake of the FTX exchange collapse. The ECB's post read, “For bitcoin proponents, the seeming stabilization signals a breather on the way to new heights.
More likely, however, it is an artificially induced last gasp before the road to irrelevance”. This statement came at a time when Bitcoin was trading at around $16,400, following a decline from its peak value of $69,000 in November 2021.
However, contrary to the ECB's predictions, Bitcoin experienced a significant rebound. After briefly revisiting the $16,400 mark in mid-December, the cryptocurrency gained 70% in the first quarter of 2023 alone. A year after the ECB’s warning, Bitcoin's value stands at approximately $43,800, marking a 166% increase since the bank's cautionary statement.
Crypto Community's Reaction to the Turnaround
The crypto community has reacted with a mixture of amusement and vindication to Bitcoin's unexpected rally. Crypto proponent Eric Wall and others highlighted the stark contrast between the ECB's predictions and the actual price action of Bitcoin.
Philip Swift, the creator of the statistics platform Look Into Bitcoin, expressed satisfaction, commenting, “You love to see it,” in response to Wall's chart analysis shared on X (formerly Twitter).
Alex Thorn, head of firmwide research at crypto education resource Galaxy, questioned the ECB's accuracy, stating, “If they’re this wrong about this, what else are they wrong about?” This sentiment reflects a growing skepticism towards traditional financial institutions' understanding of and attitude towards cryptocurrencies.
You love to see it.
ECB's Lagarde on CryptocurrencyAdding to the narrative, ECB Chief Christine Lagarde revealed last month that her son had lost money by ignoring her advice on investing in crypto. “I have, as you can tell, a very low opinion of cryptos,” she stated at a Reuters-quoted speaking engagement.
This personal anecdote further underscores the divergence in views between traditional financial authorities and the evolving world of cryptocurrency.