Should investing in cryptocurrencies be banned in the EU because the EU itself wants to establish a digital euro – small investors could make losses?
Would it be better to pull the ripcord now, before the rude awakening of long investments by small investors in cryptocurrencies (digital assets) comes when the digital euro becomes established (CBDC)?
Or should one go short in crypto assets when the digital euro establishes itself after the pre-launch phase (trial phase)?
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No, and I don't see that happening with upcoming regulations like MiCa either. The focus here is much more on stablecoins than on “ordinary” cryptocurrencies.
Furthermore, a ban would only ensure that Europe (once again) isolates itself from advances like the internet. Besides, you can simply buy Bitcoin from private individuals. No one needs to know that you're buying Bitcoin and not a service or anything else. A ban on private sales would only prove that the EU is moving towards a totalitarian system, and I think that would be the last straw for the election.
Could the ECB's decisions lead to strong short signals if it successfully (safely) implements the digital euro and thus deprives many small investors of their profits?
I think that's unlikely. Even if they wanted to abolish the free market, they wouldn't do it so openly overnight, and the legislature would have to enshrine it in law first. The ECB can't prohibit you from using your money for whatever purpose. Besides, it's not even certain that the digital euro will ever exist.
I think that this will cause Bitcoin prices to rise rather than fall.
Not possible even if they wanted to.
By the time the digital euro arrives, Bitcoin will already be far too big. Bitcoin isn't even comparable to the digital euro.
The EU would not benefit from it either, as Bitcoin is global; it would only push more wealth out of the EU.
Who should be able to ban cryptocurrencies? They exist; you can't ban them. A state could control its internet connections the Chinese way. Then it would probably be possible. Incidentally, the Chinese also have a rice rope. It's made of rice grains and is probably infinitely long.