Without a doubt, El Salvador's president, Nayib Bukele, is a big fan of Bitcoin (BTC). In 2021, the politician received approval to make the primary cryptocurrency a local currency alongside the US dollar.
Despite the negative events that contributed to Bitcoin's decline, he has remained a staunch supporter of cryptocurrency. Bukele, for example, announced today on his Twitter profile that El Salvador will buy one Bitcoin per day beginning November 18, 2022.
El Salvador's Bitcoin history El Salvador legalized it on September 7, 2021. However, this was not a decision that was universally supported. There have been numerous protests against the mandatory use of BTC in establishments.
The International Monetary Fund has even requested that the Central American country stop utilizing cryptocurrency as official currency. None of this, however, was enough to convince El Salvador's president to abandon his support for the BTC.
A study on the use of volcanoes to mine Bitcoin was even conducted, a cryptocurrency city is being built, and the country continues to buy the cryptocurrency.
The uproar over Bukele's decision was heightened when the cryptocurrency market began to experience a severe correction, causing BTC to fall from $52,700 in September 2021 to the current $16,581.
According to economist Ricardo Castaneda, El Salvador's losses are estimated to be around $70 million. This crash, however, does not appear to bother Bukele, who stated in June of this year that the country's government had purchased 80 Bitcoins at $19,000 each and now plans to keep at this rate of accumulation with one Bitcoin per day.
Is this, however, a wise decision? The manner in which the token was introduced to the country has already been called into question. After all, BTC was not intended to be mandatory but rather to be used by anyone who so desires. Even Vitalik Buterin, the creator of Ethereum (ETH), stated that requiring Bukele to use the cryptocurrency was a bad idea.
With a true understanding of the blockchain world, the population concludes that the country is losing money with this movement and needs a long-term vision because they need to understand the true value of Bitcoin.
A good example of this can be found in a survey conducted in June of this year. Seventy-one percent of the 1,270 Salvadorans polled said the Bitcoin law provided no financial benefit to them.
According to a survey conducted by the Instituto de Opinion Publico at the Universidad Centroamericana "José Simeón Caas," 12.8% of Salvadorans believe the law has a little economic benefit for their families.
As a result, it is clear that the population cannot comprehend the proposed value of cryptocurrency: money in the absence of state intervention. On the contrary, the government is forcing them to use BTC.
In this sense, with the cryptocurrency market becoming increasingly tense and more companies affected by the FTX collapse, more declines in Bitcoin can be expected. Bukele's decision to keep buying the cryptocurrency may inspire even more negative sentiment toward BTC.
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