ECB Says BitCoin is Not a Currency! Is this a problem for Bitcoin and all Coins?
The European Central bank made its position clear today about the status of Bitcoin. Here are its exact words.
“The 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.
Here is the simple chart they released called "All the Problems With Bitcoin in One Chart".
This has some interesting implications and some could be negative. Rather than get into all of them here, we will have to wait for regulation to come down from the authorities that regulate investment. The prices however seem to be holding up well after this news release, which is great.
One key one however is because they say it is not a currency, Bitcoin like in the US will be treated like an investment and can be taxed in Europe like in the US. It also will make it potentially harder for the coin to be accepted as a currency for trading purposes because it may fuel its volatility. These are only speculations, but in my opinion if they had accepted it as a currency, I believe it would have been better for the entire industry.
Of course we have to take into account that these bankers do not want any competition for the Euro and their local currencies. It will be interesting to see what this does to the price of Bitcoin and what legislation will follow. The US is said to be readying regulation and comments about what their government and regulators will do with the currency / asset. In the meantime they have made their position regarding taxing cryptocurrency purchases clear. Yu must pay taxes like purchasing a stock i.e. capital gains unless you move in and out of the currencies quickly (less than a year), in which case your gains will be treated as income and taxed at a much higher rate.
In the end, it will still be around and it will continue to gain strength because there are simply too many people excited by it.
Please give me your thoughts and insights in the comments. Thanks for reading.
For me, they can say whatever they want but everything falls on the very reason that they only want money. Technically, paper money doesn't have value not until people recognized it to have value. They said it is being backed up by gold reserve? Even gold doesn't have any value not until people gave value to it, so as cryptocurrency, the moment that people starts to accept it it will eventually have its own value and that's what they are afraid of.
@akilie1029 thanks for your comments. I understand then and agree to an extent but it is much more complicated in my opinion. Currency is not just a way to transact, it is also what supports a country and our world. Do we really want to put currency in the hands of anonymous groups that cannot be tracked and whose agendas we are not sure of? Who do we go after when something goes wrong and how can we really trust them to do the right thing by us? We are already seeing lots of scams and BS happening in the industry and wht is the recourse for people who are involved innocently. Think about this. You own a business and agree to take a cryptocurrency for your goods and then it is revealed as a scam and you are now left with this worthless currency. Who do you call? These are real issue that have not been thought through well because everyone is so excited about toppling what we have already. I will tell you something fiat currencies work flawlessly right now. The only issue is inflation and the irony is that Steem for example has inflation built into it. So there is no advantage. My point is that we need to temper our enthusiasm with reality and realize that if we tamper with what works, we had better be sure the replacement works better or we will have serious problems. Thanks again.
These are all things we already knew..
With that being said...if we break this resistance line on BTC we should be sitting pretty happy following the next few weeks. : ) - Great read and thanks for sharing.
It is not really true that nothing backs up fiat currencies. They are limited to what they can print by their economies and their ability to put value to the bills they have in circulation. If they print too much the value of their currency goes down and their printing money is useless. If this was not the case, every country would just continually print money. Also governments have a track record of paying back what they owe which props up their currencies. Unfortunately cryptos have none of these factors in place. We only have to take their word for it that they will make good on the currency they have out there. However they are all overvalued right now and none of them could pay off their "valuation". This is a problem.
Well we knew it was coming. Now we have to get through the coming information from India China and the US and we will know where things stand. I think that everything will be fine as long as people pay their taxes and down the road bitcoin or one of the other coins will be accepted as a currency. I mean when people start using them more. Thanks for the post
I agree @thaicryptokitty. thanks for your comments.