The hits keep coming for bitcoin. Most recently, the Bank for International Settlements (BIS) is piling it on, finding more faults with the biggest cryptocurrency than any redeeming qualities. The BIS stated in its latest Annual Economic Report:
“By now, it is clear that cryptocurrencies are speculative assets rather than money…Bitcoin, in particular, has few redeeming public interest attributes when also considering its wasteful energy footprint.”
Perhaps they have been listening to Elon Musk, who also has taken aim at bitcoin mining’s energy consumption. Bitcoin is no stranger to criticism or threats. The BIS’ assessment also comes on the heels of China’s cryptocurrency crackdown targeting bitcoin mining. The bitcoin price mostly shrugged off the BIS report, with the price up by a double-digit percentage in the last 24-hour stretch.
CBDCs Are A-OK
While the BIS is not a fan of bitcoin, it does not have any problem with central bank digital currencies (CBDCs,) which are catching on globally. CBDCs are digital versions of fiat money, such as the U.S. dollar, that are issued by central banks, potentially using blockchain technology, and can be used as a form of payment by individuals and businesses.
China has been an early-mover on the CBDC front and is already integrating the digital yuan into its economy. Governments that feel threatened by bitcoin, including Nigeria and Ghana, have shown their support for CBDCs. According to the BIS, there are nearly six dozen central banks currently exploring the use of CBDCs.
The BIS has placed a target on the backs of cryptocurrencies, stablecoins, and big techs, saying that they “all tend to work against the public good element that underpins the payment system.” Meanwhile, on CBDCs, the BIS’ Benoit Coeure is quoted by Reuters as saying, “The train has left the station.”
Doubling Down, Buying the Dip
Despite the regulatory spotlight, bitcoin bulls have been flexing their muscles of late, doubling down and buying the dip. Among them, Cathie Wood, who is at the helm of Ark Invest, has reportedly scooped up 1 million shares of the Grayscale Bitcoin Trust and more than 214,000 shares of cryptocurrency exchange Coinbase. Using the ARK Next Generation Internet ETF, Wood seemingly allocated USD 12 million to the Grayscale Bitcoin Trust.
Wood is not the only one buying. Chun Wang, co-founder of F2Pool, a bitcoin mining pool, is also using the market downdraft to buy more bitcoin. While the bitcoin price may be off its peak, the cryptocurrency community is used to its volatility.