Key Points
- Christine Lagarde, ECB President, has faced backlash for her opposition to a Bitcoin reserve among member countries.
- Bitwise’s Andre Dragosch countered Lagarde’s arguments, asserting that Bitcoin meets the ECB’s reserve criteria.
Christine Lagarde, the President of the European Central Bank (ECB), recently faced criticism from the cryptocurrency community for her stance against a Bitcoin (BTC) reserve among member countries.
During a press conference, Lagarde stated that reserves must be liquid, secure, safe, and free from suspicions of money laundering or criminal activity. She expressed confidence that Bitcoin would not be included in the reserves of any central banks in the general council.
Bitcoin Meets Reserve Criteria
The cryptocurrency community quickly responded to Lagarde’s statement, claiming that Bitcoin fulfills all the criteria she outlined. Andre Dragosch, Head of Research at Bitwise Europe, argued that Bitcoin is more liquid than the most liquid traditional asset, the S&P 500. He noted that the SPDR S&P 500 ETF trades around 22 billion USD in volume per day, while Bitcoin had 54 billion USD in trading volume over the past 24 hours.
Dragosch also addressed the safety of Bitcoin, highlighting that it is secured by miners and is the most decentralized network without counterparty risk. He added that it would take more than 20 billion USD to compromise Bitcoin’s system, making it a relatively safer option.
Bitcoin and Criminal Activity
In terms of criminal activity, Dragosch referred to the 2024 Chainalysis report, which revealed that less than 1% of crime-related cases involved cryptocurrencies. He stated that only 0.14% of all on-chain transactions are related to illicit activities, including money laundering, and Bitcoin only accounts for a fraction of that.
Daniel Sempere, another user, reiterated Dragosch’s points, emphasizing that the Bitcoin network secures 2 trillion USD in wealth and has never been hacked.
Lagarde’s comments were in response to the recent decision by the Czech Republic to diversify its national reserve by adding Bitcoin. Ales Michl, the Czech Central Bank Governor, had previously expressed the bank’s intention to add Bitcoin to its reserves if approved.
Whether Michl will reconsider his position on Bitcoin following Lagarde’s caution is yet to be determined. Meanwhile, the Polymarket odds of another country adopting Bitcoin briefly increased by more than 70%.
