Pieter Hasekamp, director of the Dutch Bureau of Economic Analysis, joined a growing chorus of global authorities demanding a blanket ban on Bitcoin. In an essay entitled “The Netherlands must ban Bitcoin”, the official argues that the Dutch government must ban the mining, trading, and holding of BTC with immediate effect.

Bitcoin Ban Could Cause The Price to Drop

According to Hasekamp, a Bitcoin ban would lead to an instant decline in the prices of the cryptocurrency since it “has no intrinsic value and is only valuable because others may accept it.”

The official cited hackneyed anti-crypto ideas to support his view. He argued that cryptocurrencies are incapable of performing the three primary functions of money: to serve as a unit of account, method of payment, and store of value. He also highlighted other commonly held reservations against cryptocurrencies, such as the potential for fraud and scams and easy manipulation at the hands of bad-faith actors.

Hasekamp added that the Netherlands has been trailing behind other countries that have acted quickly to “curb the crypto hype” in the last few years. He suggested that any attempts made by the Dutch regulators so far have been unsuccessful, despite the Central Planning Bureau’s warning on the risks associated with cryptos in 2018.

Calling Bitcoin “bad money”, Hasekamp leveraged Gresham’s Law, a monetary principle that states that bad money or overvalued currency drives out good money from circulation. Hasekamp said that in Bitcoin’s case, a reversal of Gresham’s law could take place. He wrote:

“Cryptocurrencies demonstrate all the hallmarks of ‘bad money’: unclear origin, uncertain valuation, shady trading practices. Is Gresham’s law back? No, on the contrary. Cryptocurrencies are not used in regular payment transactions. Bad money disappears from circulation because nobody wants to accept it anymore.”

Institutional Demand for GBTC and QBTC Has Declined

South Korean analytics firm CryptoQuant has pointed out that institutional demand for Grayscale Bitcoin Trust (GBTC) and 3iQ’s Bitcoin Fund (QBTC) has declined. The firm used three important metrics in its analysis to explain the existing downward trend. These metrics include trading premiums, market volume, and lack of new purchases to explain the sluggish demand.

Analysts at CryptoQuant have observed that trading premiums on GBTC and QBTC have been negative since March. The market volume of these trusts has also been on the decline. The firm also noted that Grayscale has not made a new Bitcoin investment since this February, whereas QBTC has released 7,980 bitcoins from its holdings this month.