Economists at the European Central Bank (ECB) have raised alarms about the potential societal impact of Bitcoin’s rising price. They argue that the cryptocurrency has shifted from Satoshi Nakamoto’s vision of a global payment system to an investment asset.

In a recent paper, ECB economists Ulrich Bindseil and Jürgen Schaaf express concerns that Bitcoin’s increasing value primarily benefits early adopters. This trend could leave later investors and those who do not hold Bitcoin facing significant economic challenges.

ECB Calls For Action Against Bitcoin’s Investment Perception

The authors highlight how thought leaders and celebrities have contributed to Bitcoin’s image as an investment with limitless growth potential. Figures like Larry Fink regard Bitcoin primarily as a financial asset, disconnecting it from Nakamoto’s original narrative of a currency for transactions.

However, instead of positioning BTC as a means of payment, these advocates liken it to gold—a finite resource viewed as a long-term investment. This perspective raises questions about society’s motivation to choose Bitcoin as an investment vehicle. Despite its volatility, proponents expect Bitcoin’s value to trend upward over time, while offering little societal utility.

“In absolute terms, early adopters exactly increase their real wealth and consumption at the expense of the real wealth and consumption of those who do not hold Bitcoin or who invest in it only at a later stage,” they wrote.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Moreover, the paper warns that early adopters might liquidate their Bitcoin holdings to purchase luxury items, leaving latecomers at a disadvantage. This dynamic could lead to wealth redistribution from newer investors to those who entered the market first, exacerbating poverty among non-holders.

“The consequences of the Bitcoin-as-an-investment vision with perpetually increasing Bitcoin prices imply a corresponding impoverishment of the rest of society, endangering cohesion, stability and ultimately democracy,” the economists argued.

To counteract these risks, Bindseil and Schaaf advocated for strict price controls on BTC. They argued that this would prevent exploitation and potential civil unrest resulting from such inequitable wealth distribution.

They also urged current non-holders to recognize the need to oppose Bitcoin. Additionally, non-holders were advised to support legislation aimed at curbing its price increase or eliminating it altogether.

“Latecomers and non-holders and their political representatives should emphasize that the idea of Bitcoin as an investment relies on redistribution at their expense. Failing to do so could skew election results in favour of politicians who advocate pro-Bitcoin policies, implying wealth redistribution and fuelling the division of society,” they concluded.

Meanwhile, the ECB’s paper has drawn sharp criticism from industry experts. Market analyst Tuur Demeester warns that the document may empower governments to impose stringent taxes and restrictions on cryptocurrency. He noted that the central bank economists view Bitcoin as an existential threat that must be countered.

“Many of us have warned that this was coming: bitcoin as a major political fault line both in national and international elections. Well here it is. It means that us HODLers must take action to insure that governments respect our basic right to hold property,” Demeester warned.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

Similarly, Marc van der Chijs, co-founder of the publicly traded BTC mining firm Hut 8, expressed concerns about the ECB’s stance. He argues that early adopters should not be vilified for their foresight and willingness to take risks.

“If Bitcoin should double or triple in 2025 I would not be surprised to see more politicians turning against BTC and trying to tax it excessively,” Van der Chijs claimed.

On October 19 DYDX price was $0.96. However, in the last 24 hours, the native token of the decentralized protocol has jumped by 30%.

As a result, DYDX is one of the best-performing altcoins today, only behind ApeCoin (APE) out of the top 100. Why is this happening, and what is next for the token?

dYdX Volume Rises Ahead of Major Event

As of this writing, DYDX’s price is $1.22. This is coming ahead of the project’s conference, which is scheduled to start tomorrow, October 21, in Dubai, suggesting that the broader market is enthusiastic about the upcoming event.

Besides this, the altcoin’s volume has surged to $210.53 million. Volume is a key indicator as it measures the relative importance of a market move. A price move with a high volume is considered more significant, while a move with a lower volume is generally viewed as less impactful.

For DYDX, the surge in volume could be linked to the conference and the project’s launch of the Trump Election Perpetual Trading Market. For context, the decentralized platform allows users to leverage positions in a perpetual trading market linked to election outcomes.

Read more: Understanding dYdX: A Guide to the Decentralized Perpetual Exchange

If the volume continues to increase with the price, then DYDX’s value might continue its upward trend. If not, the price increase will slow down.

Furthermore, this development has also affected social dominance, which tracks the level of discussion surrounding the token. When social dominance rises along with the price, it can signal growing demand for the token.

Conversely, a drop in social dominance indicates that discussions around DYDX have surpassed those of other top 100 cryptocurrencies. Given the current trend, the altcoin could climb above $1.22 in the coming days.

DYDX Price Prediction: Higher Highs Next

A look at the 4-hour DYDX/USD chart reveals that the Awesome Oscillator (AO), which was previously in the negative, has now shifted to the positive zone, signaling bullish momentum for the token.

This momentum enabled DYDX’s price to bounce off its $0.94 support level. The Chaikin Money Flow (CMF) has also shown an upward trend, indicating that accumulation around the altcoin is increasing. If buying pressure continues to rise, DYDX could potentially climb to the peak of the wick at $1.35.

Read more: Top 11 DeFi Protocols To Keep an Eye on in 2024

However, the token’s value might drop if distribution outpaces accumulation. In the short term, this could cause the cryptocurrency’s value to hit $0.94.

Ethereum co-founder Vitalik Buterin has continued his weeklong intervention on how the blockchain network’s Proof-of-Stake (PoS) mechanism can be further improved with a new essay titled “Possible Futures of the Ethereum Protocol, Part 3: The Scourge.”

In this post, Buterin discussed how Ethereum must evolve to maintain decentralization while addressing security threats.

Tackling Ethereum Staking Centralization Risks

Buterin pointed out that the Scourge is a proposed upgrade aimed at reducing the risk of centralization within Ethereum’s staking process. He explained that factors such as block construction centralization, economic incentives, and the 32 ETH staking minimum contribute to these risks. Additionally, hardware requirements for participation further intensify the problem.

“One of the biggest risks to the Ethereum L1 is proof-of-stake centralizing due to economic pressures. If there are economies-of-scale in participating in core proof of stake mechanisms, this would naturally lead to large stakers dominating, and small stakers dropping out to join large pools,” Buterin wrote.

Buterin’s proposed solution within the Scourge phase is to break up the block production process. This would shift the responsibility of transaction selection from builders to stakers, leaving builders only with the task of organizing transactions and including some of their own.

 Read more: A Deeper Look into the Ethereum Network

“The leading solution is to break down the block production task further: we give the task of choosing transactions back to the proposer (ie. a staker), and the builder can only choose the ordering and insert some transactions of their own. This is what inclusion lists seek to do,” the Ethereum co-founder stated.

Buterin also discussed alternative solutions like the Multiple Concurrent Proposers (MCP), which introduce systems like BRAID. According to him, the MCP schemes distribute the block production process across multiple entities. This lowers the barrier to participation and makes it harder for any single entity to dominate staking.

Addressing Over-Staking Concerns

Buterin also raised concerns about potential “over-staking” in the Ethereum network. Currently, around 30% of the total ETH supply is staked. Buterin cautioned that if this figure rises too high, ETH staking could become a near-mandatory obligation for ETH holders, driving more stakers to centralized platforms.

To counter this, Buterin suggested adjusting Ethereum’s issuance curve. This way, staking returns diminish if the total amount of staked ETH exceeds a certain threshold. This adjustment would prevent a small group of large stakers from gaining excessive influence over the network.

Read more: Staking Crypto: How to Stake Coins and Grow Your Income

In conclusion, Buterin’s proposals in the Scourge phase reflect his focus on maintaining Ethereum’s decentralization as it scales. By addressing the centralization risks of both staking and block production, he aims to safeguard the long-term security and openness of the Ethereum blockchain.