An opposite reaction to the “Bitcoin law” passed by El Salvador and its increasing adoption was to be expected. Mainstream media has replicated news of BTC’s alleged negative environmental impact, its use for illegal activities, and others.
However, the director of the Dutch bureau for economic analysis, Pieter Hasekamp, could be runner-up for the award for the most anti-bitcoin article of the week. His publication, titled The Netherlands Must Ban Bitcoin, is a critic of BTC and a defense of fiat currencies.
He describes the cryptocurrency as a bad form of money due to its “unclear origin, insecure valuation, dodgy trading practices”. He even says that cryptocurrencies are not used in regular payment transactions.
His reasoning is based on Gresham’s Law, which was explained in the 16th century and is used to measure the characteristics of good and bad money. This economic law has a basic principle: bad money displaces good.
Hasekamp believes the argument in defense of Bitcoin is wrong. He claims that the cryptocurrency does not have any of the three functions of money: unit of account, means of payment and store of value. At the same time, he argued that fiat currencies “do well” in these properties and are a good store of value. He said:
There has been hardly any currency devaluation in the last few decades. Although inflation is now rising cautiously, few believe we are going back to the numbers from the 1960s and 1970s.
The government official argues that a new form of electronic payments based on fiat currencies has improved their usability. His conclusion is that the current financial system “works pretty well” in practice. Going forward, he predicts that central bank digital currencies (CBDCs) will continue to improve it. He adds:
Cryptocurrencies are therefore unsuitable as a unit of account and means of payment outside the criminal circle (…). Gresham’s law is replaced by Newton’s law: what goes up has to go down. The ultimate collapse of the crypto bubble is inevitable.
On the other side of the coin, Bitcoin has a tool for progress
The Dutch government official urged countries opposed to Bitcoin to take action. He claims that waiting longer could make the “impending” crypto crash worse. He later compares cryptocurrencies to drug trafficking and explains that a full crypto ban will be more effective.
David Rosa, a Ledger developer, posted a rebuttal on his Twitter account. He claims that Bitcoin must step through the properties of money, first from a store of value to a unit of account. Additionally, he emphasizes that BTC is an emerging asset. Hence, many tried to use it to “get rich quick”.
Finally, these investors have the opportunity to get to know the unique properties of Bitcoin: immutability, censorship resistance, scarcity, freedom of permission. Many of these properties made BTC an invaluable asset for people in developing countries like El Salvador, they have access to a global financial system and savings account far from the reach of central banks. Rosa said:
It is intellectually dishonest to blame #Bitcoin and crypto assets for the financial instability caused by a crash. The fiat system is characterized by the central banks keeping interest rates artificially low, which leads to a misallocation of capital, which in turn leads to massive corrections.
Ultimately, people turn to BTC because they no longer trust their national governments. According to Rosa, this is currently the biggest crisis. In the world, central banks seem to serve their own interests more often than those of the people they are supposed to protect.
BREAKING: The director of the Dutch bureau for economic analysis calls for a COMPLETE BAN on mining, holding and trading in #Bitcoin and other crypto assets.
Article in Dutch behind Paywall: https://t.co/ECibJGBO4w
I have the most important points in thread 👇1 / pic.twitter.com/ T1Y84EJOEX. highlighted
– 🟩 David El Silvador Rosa (@dldasilvarosa) June 11, 2021
At the time of writing, BTC is trading at $ 37,041, with sideways moves in lower time frames. The first cryptocurrency by market cap needs a bull push if it is to break the $ 38,000 and $ 40,000 resistance.
BTC is moving sideways on the daily chart. Source: BTCUSD Tradingview