Economists at the European Central Bank (ECB) assert that Bitcoin's sustained value increase significantly affects wealth distribution. According to their study, early adopters are the main beneficiaries while newcomers face disadvantages.
Bitcoin's Changing Role in the Global Economy
Bitcoin's initial concept as a payment system transformation tool has not materialized, except for illicit transactions. As an investment asset, Bitcoin has evolved into a speculative tool based on expectations of further price increases, deviating from Nakamoto's vision for everyday transactions.
Consumption Effects and Wealth Distribution
Wealth concentration in the hands of early Bitcoin investors leads to shifts in consumption patterns. Rising Bitcoin prices increase their wealth, allowing them to consume more at the expense of others who reduce their purchasing power to participate in this market, exacerbating inequality.
Bitcoin as a Zero-Sum Game
ECB economists argue that Bitcoin's impact on wealth distribution is a zero-sum game. This means that Bitcoin holders' gains are accompanied by losses for non-holders. Cryptocurrency holders exhibit higher marginal propensity to consume compared to traditional equity holders, emphasizing uneven distribution.
According to ECB researchers, Bitcoin continues to support and may even exacerbate economic inequality while not significantly contributing to the economy’s productive capabilities. This scenario benefits early investors, disadvantaging latecomers and non-holders.
