Reports received earlier this year from the Swedish Financial Commission, and the European Commission indicate that both institutions are firmly against Bitcoin.
The European commission intended to ban Bitcoin at the start of the year because of Bitcoin’s high energy throughput and the impact of Bitcoin mining on the environment. On the other hand, the Swedish Financial Commission plans to impose heavy taxes on crypto gains to discourage individuals from using Bitcoin.
Since its inception, Bitcoin has outperformed all non-digital assets, making it the asset of the decade between 2010 and 2020. The halving of the highly-priced crypto-asset, which happens every four years, has also been followed by extreme bullishness for the crypto asset.
Bitcoin’s last halving occurred in 2020, and a few months after the halving, the digital asset rose from the $10,000 region to over $60,000 in 2021. This massive bullishness has caused tons of individual investors in the EU to divert their money from traditional banks to cryptocurrencies.
The switch of retail investors’ interest in the EU has attracted attention from the European Central Bank. Diversion of funds from Euros to Bitcoin weakens the Euros. In the US, traders also convert funds from USD to crypto. However, this has a lesser negative impact on the Dollar than it has on the Euros.
Bitcoin’s bullishness does not last forever, and when bull runs are over, investors convert their profits back to USDT, a stablecoin with wide adoption pegged to the US dollar. However, crypto investors do not widely use stablecoins pegged to the Euros. Thus, profits are hardly ever converted back to Euros after making crypto investments.
A major agent in Europe that has promoted the idea of clamping down on Bitcoin is Alex De Vries. De Vries is a researcher at the University of Vrije in Amsterdam. Through his papers and conferences, the researcher has severally stated that there is a need to suppress Bitcoin and end its halving.
The Netherlands researcher believes this can be done by imposing crypto taxes and setting trading restrictions for cryptocurrencies like Bitcoin.
While the European Central Bank and the Central Bank of the Netherlands seem to be looking for different ways to suppress Bitcoin and crypto prices, institutions in the United States are coming to terms with Bitcoin. The US is now the global crypto mining hub, and institutional adoption of Bitcoin in the US has soared in the past year.
