Five-time UFC champion Conor McGregor is neck-deep in the push for a Strategic Bitcoin Reserve for Ireland. This time, the presidential aspirant has earned a sit-down with El Salvador’s Nayib Bukele to explore the possibilities.
Conor McGregor Will Discuss A Strategic Bitcoin Reserve With Nayib Bukele
Hours after urging the Irish government to establish a Strategic Bitcoin Reserve, Conor McGregor is headed to El Salvador for a high-level meeting with President Nayib Bukele. According to an X post by American journalist Max Keiser, President Bukele and Conor McGregor are set for a meeting revolving around Bitcoin adoption.
Keiser notes that the meeting will take place at the Bitcoin Nation State Summit, with an Irish Strategic Bitcoin Reserve a key agenda item. The confirmation follows McGregor’s previous request for a meeting with El Salvador’s president over a Bitcoin accumulation strategy.
“The nation state Saylor play can be rolled out in Ireland,” said Keiser. “This would be TOPIC No.1 at the Bitcoin Nation State Summit between President Bukele and Conor McGregor.”
McGregor, a presidential aspirant in Ireland’s upcoming polls, has previously urged the government to adopt a Bitcoin Strategic Reserve. In his submission, the UFC champion notes that a BTC reserve will “give power back to the people.”
El Salvador’s President Nayib Bukele has shown strong resolve in sticking to a national Bitcoin accumulation strategy. Despite an IMF embargo against using public funds to buy Bitcoin, El Salvador is doubling down to acquire one BTC per day.
UFC Champ Sees Potential In Other Cryptocurrencies
Apart from confirming a keen interest in a Strategic Bitcoin Reserve, Conor McGregor has his sights on other cryptocurrencies. The UFC champion is considering trustless and transparent applications of cryptocurrencies to improve government processes.
“I can see lots of transparent and trustless applications within crypto,” said McGregor. “And I cand see an immutable people’s money with Bitcoin.”
However, his plan revolves around achieving government accountability with the post sparking debates between Bitcoin maxis and crypto pluralists. Cardano founder Charles Hoskinson has reached out to set up a meeting, but at press time, nothing concrete has materialized.
There is growing speculation that McGregor will settle for a Strategic Bitcoin Reserve and a Digital Asset Stockpile of select cryptocurrencies.
Barely a month ago, a Conor McGregor memecoin flopped upon launch, joining a growing pile of failed celebrity tokens. However, recent comments follow a rise in cryptocurrency market prices, with BTC inching toward a new all-time high.
The post Conor McGregor To Discuss An Irish Strategic Bitcoin Reserve With El Salvador’s Nayib Bukele appeared first on CoinGape.
]]>El Salvador’s President Nayib Bukele has stated that the country will continue buying Bitcoin (BTC) despite conditions set by the International Monetary Fund (IMF) in a recent financial agreement.
The IMF had included restrictions on further government Bitcoin purchases as part of a $3.5 billion financing deal, but Bukele made it clear that his administration has no plans to stop accumulating the cryptocurrency.
Bukele Rejects IMF’s Bitcoin Restrictions
The IMF’s agreement with El Salvador includes specific measures to limit government involvement with Bitcoin, including a ban on new acquisitions. However, El Salvador’s President Nayib Bukele dismissed these restrictions, posting on social media that Bitcoin purchases would continue.
“This all stops in April. stops in June. This all stops in December. No, it’s not stopping,” Bukele wrote on X. He also added, “Proof of work > proof of whining,” suggesting that his government remains committed to its Bitcoin strategy despite external pressure.
The IMF’s financing deal, worth $3.5 billion, includes measures aimed at regulating the country’s Bitcoin use. One clause states that the public sector is prohibited from “voluntary accumulation of Bitcoin.” However, shortly after the IMF published this information, El Salvador announced new Bitcoin purchases, adding 19 BTC over the past week and an additional token the following day.
El Salvador Continues Bitcoin Accumulation
Despite the IMF’s conditions, El Salvador has continued to expand its Bitcoin reserves. Data indicates that the government now holds approximately 6,101 BTC, valued at around $530 million at current market prices.
El Salvador has been purchasing one Bitcoin daily since November 2022. The latest acquisition follows multiple previous purchases made in January and February, even after the IMF agreement was finalized. The government’s actions suggest a strong commitment to its Bitcoin strategy regardless of external regulations.
Michael Saylor, co-founder of MicroStrategy and a strong advocate for Bitcoin, also weighed in on the situation. Replying President Nayib Bukele’s post, Saylor wrote, “Bitcoin adoption is unstoppable,” showing his support for El Salvador’s ongoing Bitcoin strategy.
IMF’s New Rules on Bitcoin Transactions
The IMF’s agreement also includes broader regulatory measures related to Bitcoin. As part of the deal, the government is required to publish all wallet addresses used for Bitcoin transactions. Additionally, audited financial statements must be released for crypto-related government entities.
Another key requirement is the liquidation of the Fidebitcoin trust fund by July 2025, which was originally established to support Bitcoin adoption in El Salvador. The government is also expected to withdraw from direct involvement in the Chivo Wallet system, the country’s official Bitcoin payment platform.
Further amendments to the Bitcoin Law are also being introduced. These changes aim to make Bitcoin acceptance voluntary rather than mandatory for businesses. This marks a shift from El Salvador’s initial stance when it became the first country to adopt Bitcoin as legal tender in 2021.
El Salvador’s Broader Tech and Economic Strategy
While Bitcoin remains a key part of their financial strategy, the country is also expanding its focus on technology and economic development. Bukele recently held discussions with prominent investors, including Ben Horowitz and Marc Andreessen of a16z, regarding artificial intelligence (AI) investments.
The government is considering tax incentives and regulatory frameworks to attract tech companies to the country following US footsteps under President Donald Trump who are hosting a crypto summit to ease the growth of the crypto sector. Consequently, Bukele’s administration aims to position El Salvador as a hub for innovation in Latin America while maintaining its Bitcoin strategy.
Despite pressure from the IMF, El Salvador’s leadership appears determined to continue its Bitcoin acquisitions while also seeking economic growth through new technology investments.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
From buying one BTC a day, El Salvador President Nayib Bukele is taking the country’s crypto plans to the next stage with the goal of having a Bitcoin node at every home. Max Keiser, the senior Bitcoin advisor to President Bukele, revealed the key news about plans to transform the country into a full-blown BTC ecosystem this year.
El Salvador Crypto News: Bitcoin Node At Every El Salvador Home?
Max Keiser spoke about President Nayib Bukele’s bold vision to introduce a Bitcoin node at every home thereby setting up global precedence in crypto adoption. The broader goal here is to promote economic decentralization and promote financial inclusion. Additionally, it also seeks to promote a decentralized nation-state model in the country.
Through its Bitcoin acquisition plans over the years, and making BTC a legal tender, El Salvador has managed to effectively reduce debt. Now, installing Bitcoin nodes could bring major benefits in terms of enhanced security and user autonomy.
It would also mean greater decentralization of citizens’ finances while reducing reliance on centralized points. Furthermore, it would improve accessibility, empowering more people to safely and effectively engage in the crypto economy.
It will be interesting to see whether El Salvador residents accept this plan from the President. The launch of the Bitcoin volcano bonds, which sought to raise $1.0 billion for the construction of Bitcoin mining infrastructure in the country, had very low acceptance rates.
Some critics have also argued that having a BTC node at every home is not a viable idea while calling it “grand illusion”. Moreover, El Salvador’s recent IMF deal for a $1.4 billion loan could put limitations to its bold plans. Despite this, the Latin American country is emerging as a strong choice for crypto firms to set up base.
A Safe Haven For Crypto Firms?
Amid the growing regulatory scrutiny and this crypto adoption news, El Salvador is emerging as a safe haven for crypto firms to set up base. Over the past week, two top crypto firms – crypto exchange Bitfinex and stablecoin issuer Tether – have announced their expansion plans in the Latin American country.
Bitfinex Derivatives, the official platform under its Seychelles-based parent company, secured the Digital Asset Service Provider (DASP) license in El Salvador, as part of its efforts to expand presence in Latin America.
Yesterday, January 13, largest stablecoin firm Tether announced that it has secured the same DASP license for setting up a physical office in the Latin American country. As a result, the firm will entirely shift its operations in the nation.
Bhushan Akolkar
Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Nayib Bukele, the President of El Salvador, has hinted that a Bitcoin buying opportunity looms, sparking optimism among investors. This stems from the recent development wherein the US Government sold $6.7 billion worth of Bitcoin tokens. The community anticipates a higher selling pressure which will pull down prices, potentially to $90,000.
El Salvador President Teases BTC Buying Opportunity
Prices of Bitcoin, or any other cryptocurrency for that matter, have fluctuated based on the market sentiment along with other factors. Besides, it also reflects the heavy selling pressure in the market, indicating that the volatility is likely to continue for some time now.
However, while some look at it as a bearish phase, others call it price correction. Besides, a flurry of prominent figures like Rich Dad Poor Dad author Robert Kiyosaki, Nayib Bukele, and others deem it a great chance to buy the token at a discounted price.
There is no denying the fact that the price of BTC has been struggling for the last couple of days, considering it has dropped below $95,000 with many calling it a price crash. The US Government has sold Bitcoin tokens that were seized from Silk Road and the token price is only going downhill since that development.
Assuming BTC does fall to $90,000, it would be a ‘prophecy which came true’ moment for El Salvador’s President, Nayib Bukele, allowing crypto enthusiasts to accumulate more tokens to their portfolio.
What’s Next for BTC?
The current exchange BTC price is $94,061.07 which is down by 1.26% in the last 24 hours and 1.43% in the last 7 days. There is also a decline in the market cap and 24-hour trading volume of 1.25% and 2.99%, respectively. The flagship token did touch upon the pinnacle of $102,464.43 earlier this week but the struggle is more than evident now and chances are that what’s next for the token is a further decline in the price chart.
A flurry of market participants are rather optimistic about the scenario with most of them pitching to proceed with the purchase of tokens if prices decline and become the ‘next Singapore’. This case could demand becoming the next ‘El Salvador’ because the nation is also known for boosting its crypto holdings and mainstreaming them widely.
Coming days for BTC are filled with two perspectives with one establishing a good chance to buy the dips and another depicting a chance to save losses if anyone is holding BTC for a short term. It is still highly speculated that BTC will fall further unless Donald Trump makes another move as he did recently by hosting Brad Garlinghouse over a dinner.
Bottomline
Nayib Bukele’s post on X has sparked an optimistic side for BTC enthusiasts. There is a high chance that Bitcoin price will bounce back if it does fall to around $90,000, for it might be backed with heavy purchases by those wanting to make the most of the dips.
Besides, Robert Kiyosaki also shared a similar sentiment recently, where he said that he would continue to accumulate more BTC as the prices went towards the South. This showcases the confidence of the traders towards the flagship crypto. However, given the heightened volatile scenario in the market, investors should exercise due diligence before putting their bets into the assets.
Coingape Staff
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
El Salvador’s President Nayib Bukele, at 42, begins his second term on Saturday with unprecedented support from the electorate. Re-elected in February with a sweeping 85% of the vote, Bukele now enjoys near-total control over parliament and other state institutions. His aggressive crackdown on criminal gangs has returned a sense of normalcy to a society long plagued by violence, cementing his popularity.
Despite facing criticism from human rights organizations, Bukele, who unapologetically refers to himself as a “cool dictator,” stands as the most popular leader in Latin America according to regional polls. This widespread support has translated into a dominant legislative presence, with his New Ideas party capturing 54 out of 60 seats in the legislative elections, giving him significant power to implement his policies.
Bukele’s Bitcoin Adoption and Economic Strategy
One of the most ambitious and controversial aspects of Bukele’s administration is the adoption of Bitcoin as legal tender. In 2021, El Salvador became the first country in the world to embrace Bitcoin in this way, a move aimed at revolutionizing its economy. Bukele’s strategy is multifaceted: he aims to attract foreign investment, increase financial inclusion among unbanked citizens, and reduce reliance on the US dollar.
This bold initiative involved the investment of an undisclosed amount of taxpayer money into Bitcoin, despite stern warnings from international financial institutions about the cryptocurrency’s notorious volatility. Bitcoin’s price fluctuations have been dramatic, with lows of $16,000 and highs reaching $73,797. Bukele, however, remains steadfast in his belief that the potential benefits of Bitcoin, such as lower remittance fees and greater economic autonomy, outweigh the risks associated with its instability.
Bukele’s Bitcoin gamble comes at a time when El Salvador faces significant economic challenges. The country’s public debt has ballooned to over $30 billion, or 84% of its GDP, and economic growth is projected to slow to 3% this year from 3.5% in 2023. Critics argue that the volatility of Bitcoin could further destabilize the economy, increasing financial uncertainty. Despite these concerns, Bukele asserts that his administration’s efforts to reduce violent crime will support economic stability and growth.
His promise of a “period of prosperity” hinges on the successful integration of Bitcoin into the economy and the broader acceptance of this cryptocurrency by the global financial community. As Bukele continues to push his vision, the outcome of this financial experiment will be crucial in shaping El Salvador’s economic future and could set a precedent for other nations considering similar moves.
Also Read: Dogecoin Price: Whale Shifts 421M DOGE Sparking Price Speculations
Inauguration and International Relations
Bukele’s inauguration ceremony, held at the National Palace in San Salvador, was a high-profile event attended by dignitaries from around the world. Notable attendees included Spanish King Felipe VI and Argentine President Javier Milei, both of whom underscore Bukele’s influence and the international interest in his administration.
Additionally, Donald Trump Jr. was present, highlighting Bukele’s connections and admiration for former U.S. President Donald Trump. This gathering of prominent figures not only signifies Bukele’s growing stature on the international stage but also reflects the broad spectrum of support and curiosity regarding his unconventional policies, particularly the adoption of Bitcoin.
Also Read: Ethereum Founder Vitalik Buterin & Others Applauded By MatterLabs Amid ZK Saga, Here’s All
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The recent Bitcoin price pump to $42,000 has seen El Salvador’s BTC investment currently at a profit of about $3.6 million.
After El Salvador adopted Bitcoin (BTC) alongside the United States dollar as a legal tender in 2021, the country received significant criticism with some economists signaling a doomsday. However, President Nayib Bukele has remained steadfast since the country airdropped Bitcoins with $30 to every eligible citizen. Moreover, the country has put in place Bitcoin mining infrastructure with the help of renewable energy sources, developed a Bitcoin city, and issued Bitcoin bonds that have turned successful, per Wall Street analysts.
El Salvador’s Bitcoin Investment Update
Following the 60 percent Bitcoin price spike in the past three months to hit a new yearly high of around $42k, most of the Bitcoin holders have turned profitable. According to President Bukele, the country’s Bitcoin investments are in ‘the black’, signaling notable profitability. To begin with, President Bukele indicated that the country’s Bitcoin investments have not only broken even but also turned profitable by more than $3.6 million. However, President Bukele reminded his critics and supporters that the country does not intend to take any profit despite the heightened volatility.
“…Of course, we have no intention of selling; that has never been our objective. We are fully aware that the price will continue to fluctuate in the future, this doesn’t affect our long-term strategy,” Bukele noted.
Earlier this year when Bitcoin price revisited the 2022 bear market lows, President Bukele announced that the country world would be making Bitcoin daily purchases. As a result, El Salvador now holds Bitcoins worth approximately $130.88 million, with a net profit of about 2.84 percent.
El Salvador’s #Bitcoin investments are in the black!
After literally thousands of articles and hit pieces that ridiculed our supposed losses, all of which were calculated based on #Bitcoin’s market price at the time…
With the current #Bitcoin market price, if we were to sell… pic.twitter.com/gvl2GfQMfb
— Nayib Bukele (@nayibbukele) December 4, 2023
Meanwhile, President Bukele has urged the critics of the Bitcoin adoption agenda to retract their statements and offer apologies. Otherwise, he also urged traditional financial institutions like the World Bank to acknowledge that the country is not at risk of defaulting on its loans and it is a profitable nation.
Market Outlook and Price Action
Bitcoin price has continued to outperform traditional stock markets and indexes, thus attracting deep-pocketed investors. With the banking crisis recorded in the United States earlier this year, the long-term success of Bitcoin has been confirmed unanimously by most economists. Moreover, Bitcoin is a decentralized digital currency that is well positioned to dethrone the United States dollar as the global reserve currency and gold as the best safe haven.
Moreover, the fourth Bitcoin halving, which is scheduled during the first half of 2024, will reduce Bitcoin’s annual inflation by half to less than 1 percent. On the other, the supply of gold in the universe is uncapped and the United States dollar continues to struggle to lower its inflation to 2 percent. As a result, Bitcoin price is expected to rally exponentially beyond its all-time high by mid-2025 as the heightened demand coupled with a supply shock triggers the next bull rally.
Pro-Bitcoin presidential candidate Javier Milei has won the Argentina presidential run-off election, beating his opponent Sergio Massa. Several Bitcoin proponents including MicroStrategy’s Michael Saylor, BitMEX’s Arthur Hayes, and Elon Musk congratulated Milei on the victory. Max Keiser, Bitcoin advisor to El Salvador President Nayib Bukele, said the team is going to Argentina to discuss Bitcoin ambitions with Javier Milei.
Nayib Bukele’s Bitcoin Team To Visit Argentina
Max Keiser on November 20 asked El Salvador President Nayib Bukele for an official visit of the Bitcoin team to Argentina. He added that the team will invite new President Javier Milei to “dine at the Presidential Palace here in El Salvador and talk about Bitcoin”.
In a succeeding post on X, Max Keiser revealed that President Nayib Bukele has cleared Team Bitcoin El Salvador to visit Argentina on a Bitcoin diplomatic mission of peace and economic freedom.
El Salvador already adopted Bitcoin as a legal tender to counter inflation and offers freedom to its people from central banks’ authority. The region of Latin America appears to be the first place where Bitcoin adoption on a national scale will begin.
Argentina’s new President Javier Milei had openly criticized the country’s central bank, denouncing it as a scam and a “mechanism through which politicians deceive the public with inflationary taxes.” He also views Bitcoin as a movement toward “restoring money to its original creator, the private sector”.
Also Read: Microsoft’s Satya Nadella Hires Sam Altman And Greg Brockman
Bitcoin Kicks Up 3% After Javier Milei’s Win
BTC price rallied 3% and moved past $37,000 after Argentina elected Javier Milei as the country’s new President. The price is currently trading at $37,255, with a 24-hour high of $37,509.
With nearly 99% of the votes tallied, Milei secured over 55% of the votes, establishing a substantial lead of almost 3 million votes, as per Bloomberg data.
Max Keiser said Milei’s victory can start a rally towards $40,000. Trading volume has increase after the big event and indicates a further upside move in BTC price.
Also Read: Elon Musk Mocks Sam Altman And Greg Brockman After Microsoft Hires Them
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
It was about time that Binance ’s CEO, Changpeng Zhao, visited El Salvador. His company is the biggest cryptocurrency exchange in the world and El Salvador is the first country to adopt bitcoin as legal tender, why did this take so long? According to the Secretariat of Communications of the Presidency of the Republic of El Salvador, Binance’s CEO is visiting the country “along with other entrepreneurs, who are interested in knowing the investment possibilities.”
Hoy llegó a El Salvador el CEO y fundador de @BinanceES, Changpeng Zhao (@cz_binance), junto a otros empresarios, quienes están interesados en conocer las posibilidades de inversión, en el primer país del mundo que adoptó el #Bitcoin como moneda de curso legal.
pic.twitter.com/XBYVwyZ8Dd
— Secretaría de Comunicaciones
What will Changpeng Zhao meet President Bukele about? Reuters caused quite the commotion when they tried to guess.
Related Reading | Binance’s CZ Wants Entrepreneurs To Create Coins. Does His Argument Make Sense?
What Did Reuters Say About Binance ’s CEO Visit To El Salvador?
As far as Reuters is concerned, CZ is visiting El Salvador to assist them with the issuance of the volcano bonds. They literally said:
“El Salvador is seeking support from cryptocurrency exchange Binance for its implementation of bitcoin as legal tender and the issuance of bitcoin bonds, the Central American country’s ambassador to the United States said on Wednesday.”
Is that what he’s here about, though? In the closest source we found, EFE quotes Mayorga telling “local media,” “We need businessmen his stature to support the issue of subscription to the volcano bonds.” In the ambassador’s Twitter account, Milena Mayorga welcomes Changpeng Zhao, CEO of Binance, “with the largest cryptocurrency wallet in the world.” Don’t ask.
Hemos dado la bienvenida a Changpeng Zhao @cz_binance, CEO de @binance, con la wallet de criptodivisas más grande del mundo.#LibertadEconómica #Bitcoin
— Milena Mayorga (@MilenaMayorga) March 23, 2022
According to Reuters, “Mayorga said Zhao’s visit was a vote of confidence in Bukele’s decision to adopt bitcoin as legal tender last September, as well as its plan to issue bitcoin-backed bonds.” According to her own tweets, they discussed, “strategic projects such as Bitcoin City, Surf City among others, was what we shared with the delegation of investors from Binance and companies.”
Proyectos estratégicos como #BitcoinCity, #SurfCity entre otros, fue lo que compartimos a la delegación de inversionistas de @binance y empresas que nos acompañan en esta 13 misión de negocios. pic.twitter.com/l6TOJNklAm
— Milena Mayorga (@MilenaMayorga) March 24, 2022
Who’s That Dark Figure Behind Binance ’s CEO?
The visit of one of the great businessmen of our time is most likely a positive for El Salvador. However, who’s that behind him? Could it be…? A pseudonymous Twitter user provides the necessary blown up pictures:
— mutatrum (@mutatrum) March 23, 2022
That’s right, notorious lurker Brock Pierce. Of course, he is one of the “other entrepreneurs.” If you squint, you can also see him in one of Milena Mayorga’s pictures. Let’s remember what our sister site Bitcoinist reported the first time that the EOS creator lied his way into the Presidential Palace:
“Something is rotten in the state of El Salvador. The first nation to declare BTC as legal tender received no other than the infamous Brock Pierce. An “Official Delegation of Bitcoin Ambassadors” reportedly met with President Bukele and other government officials. However, is there such thing as an “official delegation” of a decentralized protocol? No, there isn’t. And the whole Bitcoin community is up in arms about the situation.”
And just like that, Brock Pierce is back in San Salvador. Who would’ve thought?
BNB price chart on BinanceUS | Source: BNB/USD on TradingView.com
President Bukele Responds To The Rumors
In a since-deleted tweet, Bitcoin Magazine echoed Reuters’ take on the nature of Binance CEO’s visit to El Salvador. President Bukele asked them to “please don’t spread Reuters FUD. The Bitcoin Volcano Bonds will be issued with Bitfinex. The short delay in the issuance is only because we are prioritizing internal pension reform and we have to send that to congress before.”
I’m meeting with @cz_binance tomorrow to discuss OTHER issues, not the Volcano Bonds
Unless he wants to buy some, of course
#Bitcoin fixes FUD!
— Nayib Bukele (@nayibbukele) March 23, 2022
To that, President Bukele added “I’m meeting with Changpeng Zhao tomorrow to discuss OTHER issues, not the Volcano Bonds. Unless he wants to buy some, of course.” And Binance CEO responded, “Looking forward to it. Plenty to discuss.” And, to be fair, Reuters also said that “Zhao praised El Salvador for taking on a pioneering role in the adoption of bitcoin and said Bukele’s presidency would be remembered in “heroic” terms for its bold bet on the future.”
Related Reading | Binance’s CZ Explains Why Banning Crypto Ads Won’t Affect Demand
Is Binance CEO’s visit to El Salvador priced in? Will the BTC price move because of it? What about BNB? Will Binance make moves in El Salvador? Does the market care about this historic visit? The next few days will answer all of those questions.
Featured Image: Changpeng Zhao in El Salvador, screenshot from this video | Charts by TradingView
Bitcoin’s price falling as much as it has in the past few days is putting pressure on El Salvador. El Salvador’s dollar-denominated bonds have been falling in free fall for the past few months. The country’s president, Nayib Bukele, hopes to change its economic reality by issuing Bitcoin denominated bonds.
However, Steve Hanke, a professor of applied economics at John Hopkins University, has warned that president Bukele’s continued alliance with Bitcoin could be very costly for the country’s economy and the state of its dollar-denominated bonds. He called out Bukele’s often Bitcoin purchases, saying that the president should “gamble” on Bitcoin with his money and not taxpayers’ funds if he was so interested in Bitcoin.
Steve Hanke first raised concern over the state of the country’s bonds in December after Bukele announced plans to issue $1 billion worth of Bitcoin denominated bonds. Half of the proposed amount that the bond issuance will raise will be used to finance the construction of a Bitcoin City, while the other half would be used to purchase more Bitcoin for the country’s reserve.
The professor’s latest warning is coming after El Salvador recently announced that it was sending about 20 bills to its legislature that would give the Bitcoin bonds legal backing. Hanke, who has advised emerging market nations on currency issues, has not missed any previous chance to criticize El Salvador’s adoption of Bitcoin. He has described the Bitcoin adoption move in very strong terms including “insane” and “irresponsible.” His sharp criticisms have not gone without a response from Bukele who has pointed out that the country’s investment in Bitcoin has been doing well.
The situation of El Salvador’s bonds and how Bitcoin can help
Indeed, El Salvador’s dollar-denominated bonds have been struggling since Bukele announced the plans to issue Bitcoin bonds. As of November 2021, El Salvador’s bonds that are to mature in 2023 slid past its May all-time high. This resulted in the yield rising above 17% from around 6.3% at the time according to data from Boerse Frankfurt. The country’s debt is still trading in the distressed territory, meaning that the country is likely to default or is already defaulting in its security status.
However, analysts have noted that the announcement of Bitcoin bonds has not been the only factor that played a role in the sliding bond rate. According to Marc Ostwald, chief economist at London-based ADM Investors Services International, the bonds of other emerging economies are also facing the same plight due to concerns over COVID-19 and the plans of the US Federal Reserve Bank.
“There has been a sharp widening of spreads between the emerging market bond yields and Treasury yields in the past two weeks and an uptick in yields on investment-grade and high-yielding bonds,” Ostwald told CoinDesk last month.
However, the Bitcoin bonds the country plans to issue could be instrumental in bringing El Salvador out of the rut. This is because Bitcoin remains an attractive prospect for investors as the asset has been the best performing asset of the last decade. The Bitcoin bond, which Nayib Bukele recently predicted will be oversubscribed when it launches, will allow investors to bet on the potential price surge of Bitcoin. The President remains bullish on Bitcoin, predicting recently that the asset will smash $100,000 in the near term.
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
El Salvador President Nayib Bukele tweeted his forecasts for Bitcoin in the year on New Year’s Day 2022, making some rather bullish predictions.
Bukele Make Bullish Predictions On Bitcoin
Under Bukele’s presidency, El Salvador became the first government to embrace Bitcoin as legal tender last year as a countermeasure to the country’s rising inflation. Since the country’s legalization, the president has purchased 1,370 BTC for the country’s reserve and spent the unrealized gains in new infrastructure projects like a hospital and a school.
In 2022, President Bukele expects two more countries to join El Salvador in adopting Bitcoin as legal tender. He also predicted a bull run that would push the price of Bitcoin to a new all-time high of $100,000.
2022 predictions on #Bitcoin:
•Will reach $100k
•2 more countries will adopt it as legal tender
•Will become a major electoral issue in US elections this year
•Bitcoin City will commence construction
•Volcano bonds will be oversubscribed
•Huge surprise at @TheBitcoinConf— Nayib Bukele
Out of the six predictions he made, it appears that “two more countries will adopt it as legal tender” is rather cogent.w On September 7, 2021, El Salvador became the first government to make BTC legal tender, igniting a revolution that drew the attention of many other world leaders. This is an intriguing statement, especially after El Salvador’s ambassador to the United States, Milena Mayorga, stated that if Bitcoin adoption is successful in El Salvador, other countries “will follow.”
Another point worth noting is that he believes Bitcoin will become a big election topic in the United States this year. Parliamentary elections will be held in the country, and this might be one of the key issues of conversation in the United States. This might have a significant impact on the cryptocurrency industry and how businesses manage virtual currencies.
Many politicians have expressed support for the asset class, including 2020 Democratic presidential candidate Andrew Yang and Republican senators Cynthia Lummis and Warren Davidson. Other politicians in the United States have expressed their concerns about the issue. Senator Elizabeth Warren, for example, believes it favors just the wealthy. As more lawmakers get educated on the subject, it will be fascinating to see how Bitcoin regulation develops in the United States.
BTC/USD Fall further from christmas high. Source: TradingView
Related article | Zimbabwe Could Adopt Bitcoin As Legal Tender Following El Salvador
Bitcoin City To Begin
El Salvador is also planning to begin development on the so-called Bitcoin City in 2022. This might be critical for Bitcoin businesses and investors looking to develop across the continent. He predicts that volcano bonds will be oversubscribed and that there is going to be a huge surprise at the Bitcoin Conference this year.
Late last year, El Salvador announced plans to issue $1 billion in bonds to fund the purchase of more bitcoin as well as electricity and mining infrastructure. The project’s geothermal energy will be aided by the future city’s proximity to the volcano.
In a follow-up tweet, the President stated, “This tweet will age well.” Bukele’s predictions appear to be certain, but we’ll have to wait and see when and if they all come true this year.
Related article | El Salvador Calls Another Bitcoin Dip With 150 BTC Purchase
Featured image by BBC, Chart from TradingView.com
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