Open Letter

Dear Citizens of Europe,

The European Central Bank’s (ECB) latest paper takes an aggressive stance against Bitcoin, claiming it disproportionately benefits early adopters while harming latecomers. Framing Bitcoin as a zero-sum game, the ECB warns that this wealth redistribution could deepen societal divisions. Instead of embracing Bitcoin as a technological paradigm shift, they push for legislation to cap or even eliminate Bitcoin’s price growth to prevent further inequality.

This marks a clear indication that authorities now see Bitcoin as a threat to traditional financial systems. The ECB’s argument risks justifying harsh regulations or bans under the guise of protecting social cohesion. However, this isn’t simply about early adopters versus latecomers—it’s a larger battle between financial autonomy and centralized control.

As Bitcoin supporters, we must defend the right to hold and transact with Bitcoin, emphasizing its role in decentralization and financial sovereignty. Bitcoin is a transformative shift, like the internet before it, and the ECB’s resistance reveals a deeper fear of losing control over financial power.

We stand at a pivotal moment in history where new technologies are reshaping how we think about value, money, and the future of our economies. Among these innovations is Bitcoin—a decentralized, global, and transparent financial network that promises financial freedom to individuals around the world. Yet, recent initiatives and rhetoric from the European Central Bank (ECB) suggest a deep hostility towards Bitcoin, which deserves our collective attention and pushback.

It is clear that Bitcoin, like many other transformative technologies, disrupts the traditional systems we have grown accustomed to. The ECB has, at times, dismissed Bitcoin as a speculative bubble, predicting its demise. In 2022, they called the price movement following FTX’s collapse a “dead cat bounce,” yet Bitcoin has not only rebounded but surged. More recently, their concern seems to have shifted to the idea that Bitcoin’s rising price could create inequality between those who own it and those who don’t. While protecting citizens from financial harm is a noble goal, the underlying message is far more alarming: discouraging individuals from exploring Bitcoin by highlighting its success and value appreciation over time.

Bitcoin: A Right to Choose Financial Independence

First, we must ask ourselves: Why should citizens be discouraged from participating in an asset class simply because it has appreciated in value? This same logic would have prevented countless people from buying stocks like Tesla, Amazon, or Apple, whose prices have also skyrocketed over the years. In a free society, individuals must have the right to make informed decisions about their investments, and Bitcoin is no different.

The ECB’s concerns seem rooted in a desire to preserve control over the financial system. Bitcoin, by its very nature, decentralizes power away from traditional financial institutions, offering an alternative that puts financial sovereignty in the hands of individuals. It is this very independence that makes Bitcoin so revolutionary, and it is exactly what central authorities fear.

The ECB’s latest critiques, notably the dismissal of Bitcoin ETFs despite their record-breaking inflows, illustrate this tension. The approval of Bitcoin ETFs by U.S. regulators was a major milestone that has fueled new interest and adoption, yet the ECB continues to claim Bitcoin is unsuitable as an investment. They dismiss Bitcoin’s lack of cash flow or dividends without considering its real use case: as a store of value and a hedge against inflation. Meanwhile, they completely overlook why Bitcoin appeals to millions around the world—especially in regions suffering from inflation, where traditional currencies have failed to maintain purchasing power.

Central Bank Policies Are Not Without Consequences

If the ECB is truly concerned about the purchasing power of European citizens, they should look inward at their own policies. Central banks, including the ECB, have engaged in aggressive money printing through quantitative easing, which has led to inflation and the erosion of savings for the average citizen. Over time, the real value of people’s money has decreased, making it harder for them to afford housing, education, and basic goods.

Bitcoin offers a hedge against this very problem. With its fixed supply of 21 million coins, Bitcoin is designed to resist inflation. In a world where fiat currencies are constantly devalued, Bitcoin’s scarcity becomes a powerful tool for preserving wealth. The ECB’s initiative to paint Bitcoin as dangerous or unfair is, therefore, deeply ironic, considering their role in devaluing the euro through continuous money printing.

Moreover, the ECB’s repeated predictions of Bitcoin’s demise fail to recognize the broader economic drivers behind Bitcoin’s resurgence. The rally seen in 2023 was not just a speculative boom; it was driven by the anticipation of a Bitcoin halving, changes in U.S. monetary policy, and the approval of Bitcoin spot ETFs—factors that remain in play today. To frame Bitcoin’s growth as purely speculative ignores its structural strengths and the market’s growing recognition of its long-term potential.

Let’s Celebrate Innovation, Not Fear It

Rather than rallying against Bitcoin, the ECB and other institutions should be encouraging innovation. Europe has a rich history of embracing technological advancements, from the Renaissance to the Industrial Revolution. Bitcoin and blockchain technology represent the next wave of innovation, with the potential to bring financial inclusion to billions of people worldwide. Blocking access to Bitcoin through restrictive regulations or fear-based campaigns does not protect citizens—it stifles progress and limits the opportunities available to future generations.

Bitcoin is also misunderstood in its association with illicit activities. The ECB’s claim that Bitcoin remains a top choice for money laundering has been debunked repeatedly. In fact, its public, transparent ledger makes it far easier to trace illegal transactions compared to fiat currencies, such as the U.S. dollar or even the once-common 500-euro note. Even the ECB’s own reports acknowledge that Bitcoin’s transparency has made it less appealing to criminals over time. Yet, this truth goes largely unrecognized in their statements.

A Call for Financial Literacy and Open Dialogue

What is truly needed is not a campaign against Bitcoin, but a broader conversation about financial literacy and responsibility. Citizens should be empowered to understand both the risks and the rewards of new financial technologies. This includes education on how Bitcoin works, how to securely store it, and the role it can play in a diversified portfolio.

We call on the ECB and European governments to promote an open dialogue, rather than a fear-based narrative. Bitcoin is not going away, just as the internet didn’t disappear when it disrupted industries. The world is moving forward, and Europe must be a leader, not a spectator, in this new financial frontier.

Closing Thoughts

The European Central Bank’s concerns—ranging from Bitcoin’s limited use in day-to-day transactions to environmental impact—cannot be dismissed outright, but they also miss the larger picture. Bitcoin is not just a currency; it’s a store of value, a hedge against inflation, and a beacon of financial freedom in an era of endless money printing.

Labeling Bitcoin a Ponzi scheme or its recent price stability as “artificial” ignores the fundamental forces driving its adoption. Just as early critics misunderstood the potential of the internet, the ECB risks missing the larger narrative by focusing on outdated arguments. Bitcoin’s decentralized, open system is not a threat to economic stability, but an opportunity for individuals to regain control over their financial futures.

Regarding its energy use, innovation is already underway to make Bitcoin mining more sustainable, much like other energy-intensive industries that are continually evolving. Instead of positioning Bitcoin as an “unprecedented polluter,” the focus should be on how to further integrate renewable energy into its ecosystem and drive forward greener innovations.

Finally, the ECB’s emphasis on reputational risk feels short-sighted in a world where major companies, institutional investors, and even nations are beginning to see the potential of Bitcoin. Regulation is essential to avoid collapses like FTX, but the key lies in striking a balance—protecting citizens while allowing for innovation. Over-regulation and dismissing crypto as a fad will leave Europe behind as the rest of the world embraces this financial shift.

Bitcoin represents more than just an asset class; it’s a movement towards a decentralized, inclusive, and transparent financial future. Instead of fear, let us lead with education and innovation, ensuring that Europe remains at the forefront of this new frontier. Early homebuyers benefited from lower prices, much like early adopters of any asset. Home values typically rise due to factors like inflation, demand, and economic growth. This makes homes more expensive for later buyers, but it’s not the result of early buyers taking value from latecomers. The increase in prices is driven by economic conditions, limited supply, and rising demand, not by the actions of those who bought earlier.

The ECB seems hyper-focused on the distributional effects of Bitcoin, claiming it creates inequality between early adopters and latecomers. But interestingly, they don’t apply the same scrutiny to the euro, which has had significant distributional consequences of its own. Since its creation, the euro has contributed to wealth inequality across the EU. Loose monetary policies and quantitative easing have disproportionately benefited those with assets like real estate and stocks, making the rich richer while eroding the savings of ordinary citizens due to inflation. The wealth gap between the wealthiest and the poorest has widened under the euro, yet this imbalance isn’t framed as divisive by the ECB.

Bitcoin, on the other hand, levels the playing field by providing an alternative to traditional, centralized systems. Its decentralized nature allows anyone, regardless of location or social class, to participate equally in a system where wealth isn’t manipulated by central authorities. Bitcoin is transparent, scarce, and accessible, offering a way for individuals to preserve and grow their wealth outside the legacy financial system that often benefits the wealthy few at the expense of the many.

The assumption that society should reject private wealth creation through investment vehicles simply because it might create inequality is a highly debatable political position. In a capitalist system, wealth is often created through the ability to recognize opportunities, take risks, and innovate—things Bitcoin early adopters did. Dismissing this in favor of enforcing equality to the point of rejecting private investment success undermines the values of risk and reward that are fundamental to market economies.

Sincerely,