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Scholar Disagrees BTC as the medium of Legal Tender

Roger Svensson, Associate Professor of the Institute of Industrial Economics, suggests Bitcoin (BTC) is unsuitable as a medium of flat money for international currency. The scholar told the Financial Times Monday.

El Salvador President revealed last week that he intends to introduce a bill to legalise BTC as its legal tender to become the first country to accept BTC for boosting its economy. Svensson argues that BTC does not meet any primary conditions as an international currency. Firstly, BTC volatility is much greater than other dominant currency in history, such as the British pound or the US dollars.

He also thinks the price and the relative values of BTC are too fluctuating and unstable, which is a disadvantage to international trading. Also, the transaction cost is high enough due to its capacity of transaction system is limited and time-consuming within a period to meet the market’s needs.

Without a guarantee from an issuer, its political risk cannot be neglected if any or more than one government or regime prohibits the transaction of BTC. For instance, China regulatory bodies banned banks and financial firms from providing crypto transaction services recently.

Money is considered as the lubricant in the economy. However, Svensson criticises that BTC does not have this monetary function to act as a medium to store value or reduce transaction costs because BTC is only accepted within a limited group. However, BTC is treated as one of the cryptocurrencies. Still, anonymous characteristics may lead to a difficulty for the third party to trace back and recognise who is behind those transactions, which is risky to commit crimes, such as money laundering or tax evasion behaviour.

Furthermore, the energy consumed by BTC mining is environmentally unfriendly and high demanding to the “currency issuance”.

The trading of BTC recently was undergoing like a roller coaster. Elon Musk, the CEO of Tesla, has used to suggest on Twitter by accepting crypto as a way of payment but withdraw himself later, the price of BTC was experiencing a considerable fluctuation.

More than 75% Salvadoran Distrust in Bitcoin as Fiat Money, Poll suggests

A poll showed that more than three-quarters of Salvadorans are sceptical towards the implementation of Bitcoin across the country, according to Reuters, citing a survey released Thursday.

About 54% of people viewed the bitcoin adoption as “not at all correct”, another 24% described it as “only a little correct.”

In comparison, merely less than 20% of people agreed with the cryptocurrency plan implemented by the government.

“This is a risky bet on digital transformation,” Oscar Picardo said, head of Disruptiva’s institute of science, technology and innovation, speaking at an event to publish the survey results. Some critics even describe the so-called “Bitcoin law” in El Salvador rob the freedom of choice of its people.

This poll surveyed more than 1200 people across the country between July 1-4, conducted by the pollster Disruptiva, affiliated with Francisco Gavidia University.

The poll also showed that nearly 65% of the respondents said they would not open to pay in the cryptocurrency, while 46% of the respondents “nothing” about Bitcoin.

The “Bitcoin Law” approved and passed by Congress in El Salvador last month, becoming the first country worldwide to adopt cryptocurrency as legal tender.

El Salvador President Nayib Bukele actively promoted the application of Bitcoin. The government later announced Bitcoin would function, effective on September 7th, as another fiat money along with the U.S. dollar in the country.

To boost the legitimacy of Bitcoin and strive for more support from the public, the government even launched an airdrop campaign by providing $30 worth of Bitcoin incentives to all users who register to its e-wallet.

Meanwhile, the government is actively seeking assistance from the Central American Bank for Economic Integration (CABEI).

El Salvador Embraces Virtual Currency Era, Nayib Bukele: Just Bought 200 New Bitcoins

Central American nation El Salvador officially adopts Bitcoin as legal tender Tuesday, becoming the first country to embrace Bitcoin as another circulating fiat currency alongside the US dollar.

President Nayib Bukele revealed on Twitter, saying the country “just bought 200 new coins, we now hold 400 Bitcoins” after the country implemented a new monetary policy.

The price of Bitcoin has broken through the $52K level, trading at $52.751K at 11:11 a.m Hong Kong time, according to data provider CoinMarketCap.

Speaking in Spanish, Bukele urged his citizens “must break the paradigms of the past”, as “El Salvador has the right to advance towards the first world”.

“Like all innovation, the process of #Bitcoin in El Salvador has a learning curve. Every road to the future is like this, and not everything will be achieved in a day, or in a month.”

Before the launch of Bitcoin, CEO of MicroStrategy Michael Saylor retweeted Bukele’s message on Monday, saying that he “is planning to buy $30 worth in BTC in solidarity” to support Salvadorans.

Bitcoin ATMs installed

El Salvador historically passed the “Bitcoin law” in June as the first nation worldwide. However, global financial institutions, such as IMF and the World Bank, were concerned if its implementation and even worried that its adoption may trigger further uncertain monetary or regulatory risks. At the same time, regional bank CABEI offered technical assistance to the country.

The dollarized economy in El Salvador is heavily reliant on remittances sent home by migrants overseas, which totalled $6 billion last year and accounted for roughly a fifth of gross domestic product, according to a Bloomberg report. Bukele claimed that Bitcoin could save Salvadorans $400 million a year in fees for these transactions.

Earlier this month, legislators have passed the $150M Bitcoin Trust Fund into the law, allowing Salvadorians to covert crypto-assets into U.S. dollars or vice versa. Bukele’s administration has installed around 200 Bitcoin ATMs nationally so far.

Domestic resistance exists

Yet, domestic scepticism and resistance still exist against the adoption of Bitcoin as fiat currency. Reuters reported last Thursday, citing a poll by UCA, a local university in El Salvador, that at least 67.9 % of the 1,281 people surveyed opposed or strongly disagree with the government’s decision on new monetary change.

Other nations are still observing if Bitcoin could “save” the economy. For example, Paraguay also introduced a bill to propose bitcoin as a legal tender.

President Nayib Bukele Confirms Purchasing 150 BTC Amid Crypto Market Crash

Just within a day after the official day of Bitcoin (BTC) becoming a legal tender in the Central American nation of El Salvador. the volatile nature of the cryptocurrency ecosystem has revealed its two sides for the first day. First came off with a massive gain in which Bitcoin attained a 7-day high of $52,853.76, a trend truncated with the Bitcoin cryptocurrency flash before crashing to a 24 hour low of $43,285.21.

El Salvador’s President, Nayib Bukele, exhibited the traits of a Bitcoin bull, announcing the country purchased an additional 150 units of the digital currency. This was targeted at shoring up the country’s earlier purchases to kickstart the new Bitcoin era.

From his tweet, Nayib Bukele thanked the International Monetary Fund (IMF) for the dip, noting that the country has yet again “saved a million in printed paper.” The President confirmed that the country now HODL about 550 BTC in its reserve. The dip has shown El Salvadorans could suffer from the worst of the cryptocurrency world, as the potential for price dips cannot be ruled out in a volatile asset-enabled financial ecosystem.

The establishment of the Bitcoin Trust Fund by El Salvador revealed the country’s preparedness for events like this. With an initial seed funding of $150 million, the fund was targeted at aiding the easy conversion of received Bitcoin into fiat currency at the point of purchase. The funds, if used, will guard vendors or users against the impacts of the flash crash.

In today’s digital currency ecosystem, there are numerous Bitcoin holders, but only a few summon the courage to stack up massive units of the digital currency amidst a growing sell-off in the market. Besides El Salvador, a Business intelligence and software firm, MicroStrategy is also known to stack up Bitcoin during market slumps. The latest purchase of 3,907 units of Bitcoin by the Michael Saylor-led firm was made during the past general market correction.

Anti-Government Protest Outbreak in El Salvador, Bitcoin ATM Burned in its Capital

Over thousand protestors marched in the capital of El Salvador Wednesday, while some Bitcoin ATMs reportedly were destroyed against the adoption of Bitcoin as fiat money.

Just more than a week after the national adoption of Bitcoin as legal tender in El Salvador, this Central American nation is challenged by the latest round of massive protest against the controversial “bitcoinization” economy by the government of President Nayib Bukele.

Protestors were marching to the central plaza in San Salvador, the capital of the country. Associated Press reported Wednesday that some protestors wore T-shirts with signs of “No to Bitcoin”. At least one Bitcoin ATM was set fire to burn and destroyed, according to Bloomberg reported. Around 200 Bitcoin ATMs has been installed across the country so far.

The adoption of Bitcoin also triggered marchers in a fury to other disappointing political issues, such as over-concentrated power for the presidency and the undermined independence of justice as President Bukele may seek for re-election, who mandated by the local supreme court recently.

In response to the latest chaos, President Bukele responded on Twitter in Spanish and challenged that why “they say the ‘vandalism’ was the work of ‘infiltrators,’ but there has been vandalism in ALL their demonstrations. And why weren’t there any shouts of ‘stop,’ or ‘Don’t do that?’”

However, the opposition party criticised that “Bitcoin as a big economic decision, (but) it was done totally illogically,” as high cost of living and unemployment still not settle, the opposition party added.

El Salvador officially adopted Bitcoin as legal tender last Tuesday, drawing the attention worldwide. More food and beverage enterprise, such as McDonald, Starbucks and Pizza Hut now accepts Bitcoin for the bill as payment.

Yet, a recent poll showed that the majority of Salvadorans still objected to Bitcoin’s implementation as the legal tender. Scepticism is still widespread across the country, while President Despite the major money transfer providers may lose their business under the new monetary policy, Bukele calmed that Bitcoin would improve the domestic economy by saving $400 million a year in fees for transactions on overseas remittances.

El Salvador Purchases 150 new Bitcoins, Bukele: Buys the dip, Now Holds 700 coins

President Nayib Bukele of El Salvador announced on his Twitter Monday that the central American nation bought 150 new Bitcoins from the dip and now accumulates 700 coins.

Bitcoin has continuously become the trending issue in El Salvador. President Bukele announced on Twitter Monday that the country has purchased extra bitcoins with his new profile picture. Giving his “presidential advice”, Bukele said that people would not be beaten if ”they buy the dips”, referring to purchase Bitcoins from the relative “low” price.

“We just bought the dip. 150 new coins! El Salvador now hold 700 coins”.

Most of the cryptocurrency prices slumped on Monday, triggered by the operational risk and its default risk from the development of the China Evergrande Group. Bitcoin was trading at $44,978 during the intraday day, according to the CoinMarketCap. These 700 coins are worth around $31.5 million based on the current price.

Despite the decline in the price of Bitcoin, analysis citing data from Glassnode suggested that the weekly on-chain exchange flow for Bitcoin recorded a negative flow of $1.1 billion. In other words, Bitcoin is in high demand as the data suggested a heavy accumulation of Bitcoin by investors, as $8.5 billion worth of Bitcoin was withdrawn from exchanges last week.

The purchase just came after the country ranks as the third-largest country worldwide to enjoy Bitcoin-driven ATMs. Locally, the adoption of Bitcoin is starting popular. More enterprise now accepts Bitcoin as the payment along with the US dollar.

The government has installed over 200 Bitcoin ATMs so far. Yet, at least one crypto ATM was destroyed under the latest massive anti-bitcoin protest outbreak in its Capital over the last weekend, as the majority of residents are still sceptical towards this most significant virtual currency becoming another legal tender across the country.

Image source: Nayib Bukele’s Twitter

El Salvador Takes First Steps Towards Bitcoin Mining Using Volcanoes

Nayib Bukele, the president of El Salvador, recently posted a Twitter video showing the “first steps” toward enabling Bitcoin mining using renewable energy in the country.

On Wednesday, September 29, Bukele posted a video with the caption “first steps” accompanied by a volcano emoji via his Twitter account, showing that the nation began its project to use geothermal energy from volcanoes for bitcoin cryptocurrency mining.

The video footage showed a glimpse of a new volcanic geothermal Bitcoin mining facility being built in El Salvador, the first nation to legalize Bitcoin as legal tender.

In June, the Salvadoran government led by president Bukele had asked geothermal electricity company LaGeo to map out a way to allow construction of a Bitcoin mining facility without causing harm to nature.

During that time, Bukele stated that mining will be very cheap and 100% clean by constructing Bitcoin mining facilities near the volcanoes. The president further disclosed that El Salvador’s state-owned electricity company LaGeo would use every affordable, 100% clean, 100% renewable, zero-emissions energy from volcanoes to mine Bitcoin.

Bukele went ahead and shared the first image of the location where he intended to construct the Bitcoin mining centre and showed the setting up procedures being conducted.

China Reshapes Crypto Landscape

In June, just hours after becoming the first country to authorize Bitcoin as legal tender, the El Salvador president, Nayib Bukele, instructed the state-owned company to plan to use geothermal energy from the country’s volcanoes for mining for the cryptocurrency.

Bukele’s moves might present opportunities for the Bitcoin mining industry at a good time. Chinese miners are experiencing a strong state crackdown in the sector. They might be encouraged to take advantage of El Salvador’s clean and cheap geothermal energy and relocate their rigs to central America.

Bitcoin mining is a purely free market – while one nation may ban it, another can always welcome it.

El Salvador’s move to legalize Bitcoin comes at a time when China continues to clamp down cryptocurrency mining and trading. China’s crackdown stemmed from the fear that cryptocurrencies alter the economic order, and therefore the country wants to prevent the transmission of individual risks to society in general.

Bitcoin Wallets Surpass Bank Accounts in El Salvador, says President Bukele

El Salvador came to the limelight with its intention to make Bitcoin a legal tender, and this objective saw the light of day in June.

The Central American country has been making significant strides in the crypto space ever since. The latest revelation is that the number of Bitcoin wallets in the nation dwarf bank accounts. President Nayib Bukele said:

“There is one country on Earth, where there are more people using Bitcoin wallets than bank accounts.”

With a population of 6.6 million, Salvadorians who have downloaded the Chivo Bitcoin wallet account for nearly half of the populace at 3 million. This contrasts with only 29% of Salvadorans with bank accounts as of 2017 based on Statista data.

However, the journey to legally adopt Bitcoin has not been smooth sailing because it has been warned of severe consequences from different quarters. Nevertheless, this does not discourage the nation’s ambitious plans to bring financial services to at least 70% of its unbanked populace using Bitcoin.

Moreover, the dividends of El Salvador’s BTC investment are starting to pay off because it intends to construct 20 new schools using profits accrued. In September, the country purchased 150 new Bitcoins bringing its accumulation to a total of 700 BTC.

El Salvador’s bold move to make Bitcoin a legal tender is attracting other nations quest to follow in its footsteps. For instance, the Zimbabwean government reportedly consulted the private sector on adopting BTC as a legal payment service.

Meanwhile, notable personalities are continuously divulging their entry into the crypto space, with the latest one being Shark Tank’s Kevin O’Leary, who revealed that cryptocurrencies comprise 10% of his investment portfolio.

Earlier this month, Apple CEO Tim Cook disclosed that he owned cryptocurrencies because they presented a diversified investment portfolio.

He also stated that the tech giant was keeping an eye on introducing crypto features in its products in the near future, even though there were no plans of making cryptocurrencies a payment option.

Bitcoin will Reach $100K in 2022: Nayib Bukele Predicts

El Salvador President Nayib Bukele predicted his bullish forecasts for bitcoin in 2022 on his Twitter on Sunday, saying that the bitcoin price will reach a high of $100K this year.

In addition, he also stated that Bitcoin will “become a major electoral issue in U.S. elections this year”, asking his 3.2 million Twitter followers to pay attention to the “big surprise” at the Bitcoin 2022 conference. He also has confidence in Bitcoin adoption, estimating two more countries might adopt it as legal tender.

Meanwhile, it is predicted that Volcano bonds will be oversubscribed. The total estimated amount to be pulled from the bonds is $1 billion. Domestically, “Bitcoin City will commence construction.”

Last year, in September, El Salvador officially became the first country to start accepting Bitcoin as fiat money along with the U.S. dollar. President Bukele predicted that two more countries will join El Salvador in 2022 and will adopt Bitcoin as legal tender.

Bukele has implemented “buying from the dip” in terms of strategy, and El Salvador has accumulated over 1,390 Bitcoins so far, according to the latest official data.

As reported by Blockchain.News on November 22, El Salvador’s President, Nayib Bukele, has unveiled the country’s plans to build the first fully functional Bitcoin city. This project is billed to be funded by a Bitcoin-backed, government-issued bond.

Bukele’s administration has pressed on building the first Bitcoin schools from the proceeds earned by HODLing, the premier digital currency.

The Central American country also airdropped the digital currency to the public, encouraging them to use the crypto wallet-Chivo. However, due to technical obstacles, 50 Salvadoran citizens have lost a total of more than 96,000 US dollars in December.

El Salvador’s Nayib Bukele Foresees "Gigantic Price Increase" in Bitcoin

The self-proclaimed Chief Executive Officer (CEO) of El Salvador, President Nayib Bukele has showcased his level of trust in the price of Bitcoin (BTC) soaring to new levels through a new tweet shared on Monday.

Nayib Bukele, who has stirred El Salvador to not just adopt Bitcoin as a legal tender, but has also acquired over 1,800 units of the cryptocurrency believes the coin’s maximum supply of 21 million is a prerequisite for massive price upliftment in the short to long term. The vocal president compared the 21 million supply of Bitcoin to the estimated 50 million millionaires in the world.

Bukele says if the total number of millionaires in the world decide to acquire at least 1 Bitcoin each, that the coin will not be enough to go around.

In his words:

“There are more than 50 million millionaires in the world. Imagine when each one of them decides they should own at least ONE #Bitcoin. But there will ever be only 21 million #Bitcoin. No enough for even half of them. A gigantic price increase is just a matter of time.”

Bitcoin has become a major investment asset for a lot of people around the world. While individual retail investors are stacking up on the digital currency, corporate establishments are also bagging an enormous amount of the digital asset on grounds that it is a better hedge against inflation and a store of value.

Today, corporations like MicroStrategy, Block Inc, and Tesla have thousands of units of cryptocurrency on their balance sheet, further driving down the supply strain the cryptocurrency is already known for.

While these companies with their acquire, have a lot to benefit from holding the coin, El Salvador also has much to gain should Bitcoin price retest its previous All-Time Highs (ATH) above $68,000 set back in November last year.