The European Central Bank said that it was on a road to irrelevance.
The apparent stabilization in its price this week signals a breather on the way to new heights according to the director general of the European Central Bank.
They wrote that it was already foreseeable before FTX went bust that it would be an artificial last gasp before irrelevance.
The world's largest digital coin hit a two-year high. However, it was not able to keep that level. The bounce is likely just a bear market rally and won't be sustained according to the vice president of corporate development at Luno. He told CNBC that the retest was just a bearish one.
The downfall of FTX, an exchange once valued at $32 billion, is one of the most catastrophic failures in recent history, and the comments from the officials from the European Central Bank are timely. Higher interest rates from the Federal Reserve have led to a decline in the market.
Bindseil and Schaff said that bitcoin wasn't suitable for payment or an investment.
It is questionable as a means of payment because ofBitcoin's design and technological drawbacks. No significant amount of legal real-world transactions have been done withBitcoin.
It's not a good investment to useBitcoin. Cash flow, dividends, and social benefits are not generated by it. They said that the market valuation of the digital currency is based on speculation.
FTX's insolvency is likely to make it harder to regulate digital currency. MiCA is expected to harmonize regulation of digital assets across the EU.
It is important not to mistake regulation as a sign of approval.
They said that the belief that space must be given to innovation at all costs is still stuck.
These technologies have created limited value for society, even though they have great expectations for the future. It's not enough for a promising technology to be used to add value to a product.
They were concerned with the poor environmental credentials of the digital currency. It takes a lot of computing power to verify and approve new transactions in thecryptocurrencies. According to backers, a new framework will cut energy consumption by more than 99%.
The inefficiency of the system is a feature, according to Bindseil and Schaff. It is one of the reasons for the integrity of the system.
The European Central Bank has raised doubts about digital currency before. Christine Lagarde, president of the European Central Bank, said in May that she doesn't think Cryptocurrencies are worth anything. The implosion of so-called stable coin terraUSD is a scandal for the industry.
CNBC had a contributor to this report.
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