Key Points
- Christine Lagarde, ECB’s president, has expressed her opposition to Bitcoin as a reserve among member countries.
- Bitwise’s Andre Dragosch counters Lagarde’s argument, stating that Bitcoin meets all criteria for a reserve currency.
Christine Lagarde, the president of the European Central Bank (ECB), has faced criticism from the crypto community for her stance against Bitcoin as a reserve currency among member countries.
During a recent press conference, Lagarde argued that reserves should be liquid, secure, safe, and free from the suspicion of money laundering or criminal activity. She confidently stated that Bitcoin would not become a reserve for any of the central banks.
Bitcoin Meets Reserve Criteria
However, Andre Dragosch, Head of Research at Bitwise Europe, has refuted Lagarde’s claims. He argues that Bitcoin is more liquid than the most liquid traditional asset, the S&P 500. He pointed out that Bitcoin had a trading volume of 54 billion USD in the past 24 hours, compared to the S&P 500 ETF’s 22 billion USD.
Dragosch also highlighted that Bitcoin is secured by miners and is the most decentralized network with no counterparty risk. He added that corrupting Bitcoin’s system would require more than $20B, making it a safer option.
Regarding criminal activity, Dragosch cited the 2024 Chainalysis report, which stated that less than 1% of crime-related cases involved cryptocurrency. He emphasized that only 0.14% of all on-chain transactions were related to illicit activities, including money laundering, and Bitcoin was only a fraction of that.
Another user, Daniel Sempere, agreed with Dragosch, noting that the Bitcoin network secures $2T in wealth and has never been hacked.
Lagarde’s comments were in response to the Czech Republic’s recent move to diversify its national reserve by adding Bitcoin. The Czech Central Bank Governor, Ales Michl, expressed the bank’s intention to add Bitcoin to its reserves if approved. It remains to be seen whether Michl will reconsider this decision after Lagarde’s warning. Meanwhile, the odds of another country adopting Bitcoin briefly rose by over 70% on Polymarket.