Bitcoin fell $10,000 on first day as El Salvador's official currency

midian182

Posts: 7,166   +65
Staff member
Facepalm: Yesterday was the first day that El Salvador adopted Bitcoin as an official currency, and what happened? BTC crashed to its lowest point in almost a month, from $52,000 to under $43,000. But President Nayib Bukele was far from worried; he took advantage of the fall to buy an extra 150 Bitcoins, increasing the country's holdings to around 550 in total, worth about $25 million.

Just a few months after adopting Bitcoin as legal tender, it became an official currency of El Salvador yesterday. It's hoped that the move will make it easier for the huge number of El Salvadorians living abroad to send money home to their families—the government says Bitcoin could save the country $400 million per year in transaction fees, though the BBC believes this to be closer to $170 million—and with three-quarters of the population lacking a bank account, proponents say adopting Bitcoin will facilitate quick money transfers.

But not everyone in El Salvador thinks moving to Bitcoin is a good idea. There have been protests over its adoption, with many citing its volatile nature as a reason to be wary. These naysayers likely felt justified yesterday when Bitcoin dipped by around 15% to under $43,000. BTC has rebounded slightly since then and is hovering close to $45,000 at the time of writing.

One of Bukele's opponents said the drop caused El Salvador to lose $3 million, but the president took a different view, tweeting that the country was "Buying the Dip"—taking advantage of the lower price by buying more. It has now added 150 Bitcoins to the 400 it already held. "We saved a million in printed paper," Bukele wrote.

Forbes writes that the price drop began when El Salvador's wallet system experienced difficulties upon its debut. "Heightened trading volume then fueled speculation about institutions selling off large stakes and even triggered brief outages and trading delays on many of the world's largest cryptocurrency exchanges," the publication explains.

Users on Twitter and Reddit were urged to buy $30 worth of Bitcoin yesterday to celebrate the crypto's adoption by El Salvador. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says that "a "pump and dump scenario is partly playing out."

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QuantumPhysics

Posts: 5,293   +6,019
BTC was at $52,000 when I went to bed that night.

$46,420 right now.

How can you possibly have a national currency with a level of volatility that high?

Crypto Currency is a ponzi scheme.

Regardless its positive uses, the reality is that people are not using it as intended - they are using it as a speculative asset and they want to get rich quick.

There are 11,000 cryptocurrencies with more being developed weekly. There's nothing special about that.
 
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wiyosaya

Posts: 6,540   +4,937
But President Nayib Bukele was far from worried; he took advantage of the fall to buy an extra 150 Bitcoins, increasing the country's holdings to around 550 in total, worth about $25 million.
:rolleyes: And here, Folks, we have the real reason El Salvador went to bitcoin - so Nayib Bukele could enrich himself. DOH!
 

mattferg

Posts: 189   +178
BTC was at $52,000 when I went to bed that night.

$46,420 right now.

How can you possibly have a national currency with a level of volatility that high?

Crypto Currency is a ponzi scheme.

Regardless its positive uses, the reality is that people are not using it as intended - they are using it as a speculative asset and they want to get rich quick.

There are 11,000 cryptocurrencies with more being developed weekly. There's nothing special about that.

How can you possibly have a national currency you have 0 inflationary or monetary policy controls over? BTC’s value vs the dollar is irrelevant if it’s a national currency buying national goods…
 

QuantumPhysics

Posts: 5,293   +6,019
How can you possibly have a national currency you have 0 inflationary or monetary policy controls over? BTC’s value vs the dollar is irrelevant if it’s a national currency buying national goods…


Crypto is a bunch of TOKENS.

Their value is fiat - and only worth what the national currency says they are worth.

Bitcoin has no value. Bitcoin's value is determined against the National currency.
 

mattferg

Posts: 189   +178
Yes, but in this case BTC IS the national currency, so 1 BTC = 1 BTC… amazing how you proved yourself wrong in your own comment and showed your lack of knowledge in the space!
 

captaincranky

Posts: 17,408   +6,143
Yes, but in this case BTC IS the national currency, so 1 BTC = 1 BTC… amazing how you proved yourself wrong in your own comment and showed your lack of knowledge in the space!
And so the value of the national currency and treasury, will bounce up and down more than a tennis ball at Wimbledon.

One bitcoin may equal one bitcoin inside the national boundaries, but it doesn't mean squat when you try and buy goods and services from abroad. Why are they moving to bitcoin? Possibly because they failed in the coke trade?

El Salvador has had an imaginary economy for decades. The Catholic religion is big down there in South America. Better hope the Holy Roman Church starts accepting bitcoin.

Now, try and say that ain't so.
 
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mattferg

Posts: 189   +178
And so the value of the national currency and treasury, will bounce up and down more than a tennis ball at Wimbledon.

One bitcoin may equal one bitcoin inside the national boundaries, but it doesn't mean squat when you try and buy goods and services from abroad. Why are they moving to bitcoin? Possibly because they failed in the coke trade?

El Salvador has had an imaginary economy for decades. The Catholic religion is big down there in South America. Better hope the Holy Roman Church starts accepting bitcoin.

Now, try and say that ain't so.

because the cost of moving currency from workers around the world is sky high and the US dollar keeps screwing them?

the fact you don’t understand this speaks volumes about the amount of research you’ve done… 0.
 

captaincranky

Posts: 17,408   +6,143
because the cost of moving currency from workers around the world is sky high and the US dollar keeps screwing them?

the fact you don’t understand this speaks volumes about the amount of research you’ve done… 0.
Well thank god we have you here to straighten me out.

As for the cost of "moving money around the world between workers". Yeah, the US screws them, we make them pay taxes. Messy, I know.

But why does it always have to come back to how bad the US is, "screwing the world".

We trained the Afghani army, gave the country billions of dollars, weapons, and support. When we left, it took that exactly two weeks to fall apart, with everybody in the world screaming about how, "we didn't do enough for them". And now, the country is "moving forward into the past" So I guess "screwing workers when moving money around", is just part of our shtick .

As for El Salvador, a country with no assets can easily use bitcoin to power their economy.. As the saying goes, "when you ain't got nothin', you got nothin' to lose".