I see your point and thanks for the feedback I'm actually more interested not in the legal tender portion but in the adding to the reserve for protection of fiat debasement I am all in favor of the Strike (lightning network), bitcoin as legal tender for enormous opportunity of adoption, unlike what happened in Japan, where everyone wants to hoard their bitcoin This would be a different approach, have your savings in bitcoin as a SoV, investment savings account for everyone, but use Strike for low-fees and instant transfers (remittance is big in LatAm countries) However, the real game changer would be replacing gold (a manipulated market with paper gold wildly increasing physical supplies) in the countries that participate in their treasury reserves These countries will be competing with Institutional Investors, HNW, Sovereign wealth funds and as it is, there's not 1 bitcoin available for all the millionaires in the world
I see. As far as replacing gold goes, I'm not sure there is a big opportunity there for BTC. The central bank of Brazil only owns about $5B worth of gold and its the largest countries in LatAm. It owns over $350B worth of US Treasuries. In Brazil, "gold" are US dollars due the history of inflation and hyperinflation. I suspect it should be similar in Colombia and other countries And the BTC savings accounts for the people, I'm not sure what would be the idea there. I mean, anyone can download an wallet app and have their BTC savings. You mean, banks doing custody because the state is encouraging it? I think what is Strike is doing is great, but its still all so early. El Salvador is a drop in the bucket next to what US, EU institutions own. I bet most people "savings" will be $50 or something. Bitcoin did become more popular in Brazil as a result of the drop in the BRL but no legal tender law was required. Anyone can buy BTC in an exchange and custody it. In any event, I dont think Bolsonaro or the economic minister ever said anything about BTC. They are old and dont care about it much. The central bank is talking about turning the BRL into a digital currency and it will probably happen sooner than most people think. Brazil had electronic voting in elections in a massive scale before most developed economies. It also implemented a free instant fiat 24/7 transfer system last year (PIX, which is a lot better than anything I ever used in my US financial accounts). So BRL becoming digital is very possible, but BTC being bought by the central bank or the President becoming a cheerleader for retail buying, I dont think that is happening at all
Yes, very good points It's true that people's savings are low, $50 would be a big amount for a normal citizen in El Salvador, but multiplied by the adult population of millions, could add up, plus the remittance angle from US relatives could increase the number I'd imagine since people are unbanked, the bitcoin will be their personal bank and can spend easily since it's legal tender, unlike in Japan situation where some big department stores like Rakuten were accepting it, but then still gotta deal with the block 10 minute average delay and/or high transaction fees Quite true on the small amount of gold they have now, but every bit counts, even $1B (20% diversification of gold to btc) is $1B worth of btc's that would be locked and not in circulating supplies for sale And perhaps the other LatAm countries would be on average $10-100M, but again, just adds up the adoption and holdings But you mentioned something that could have a bigger impact if they own UST's now, that are not paying any meaningful yields, could they possibly diversify 1-2% of that to btc? Ray Dalio himself said he prefers btc to bonds, without getting into the reasoning, which are pretty much advocated by Raoul Pal when he says btc is also going for that use case And in the worldwide arena, this could become a race to being early as everyone knows there's not enough btc's if countries start diversifying to btc for their reserves. Turkey, Lebanon, Greece.... That's what was mentioned in a few videos I've watched, could be from RV, can't remember Once 1 country adds it, the rumors of other central banks doing it becomes feedback loop that could drive the price to shoot up, becoming a panic situation to get in before others beat them to it
Funny since I have exactly the opposite impression: there has been no capitulation whatsoever, and little to no change in bullish sentiment. The narrative is that BTC is down as a knee-jerk reaction to temporary factors like China, Musk, the colonial hack, whatever, and today's levels represent an obvious value buy. Nobody (except for yours truly, and other nocoiners) seems to have raised the question of why and how an asset which is supposedly going exponentially mainstream, and being opened up to all these new channels of insatiable demand, can be down by 50% from the highs of just eight weeks ago. The fact that a company's junk bond offering to buy BTC met with enthusiastic demand is strong evidence that my impression is the correct one. That's the kind of thing which can be bullish coming near the end of a long bottoming process, or climbing a wall of skepticism - but just look at it, this is a trapped whale using borrowed funds to average down a losing trade just weeks after a major trend break. It's the same old traders' lessons playing out right before our eyes.
I dunno, I have been seeing so many articles like the following https://www.bloomberg.com/news/arti...more-than-5-in-renewed-cryptocurrency-selloff https://www.bloomberg.com/news/arti...eing-possible-drop-toward-20-000?srnd=premium https://www.bloomberg.com/news/arti...oss-as-chartist-backdrop-darkens?srnd=premium https://cointelegraph.com/news/bitcoin-price-nears-30k-as-estimates-reveal-19k-support-floor https://cointelegraph.com/news/bitc...-trader-s-20-crypto-crash-forecast-comes-true Its becoming consensus among these price callers to say the price will go to $20K or whatever There is also the following fact. After the $19,000 peak in December of 2017 the price didnt go straight down to the -80% level. It only decisively broke the $6,500 support level in November of 2018, nearly one year later. The avg price of the entire 2018 was actually around $7,300 even though the bottom was $3200 in December of 2018, and there were plenty of rallies to $9-$10K. I dont think there will be a 80% drop because the excesses of the price never reached the levels of 2017 but even if somehow that were the case, it doesnt mean its going to do that straight away nonstop for 2 months after the peak. That's wishful thinking by the bears and the more they stick their neck out to call for more, the more I think they are getting confident they can predict the price which tells me what they expect will not happen because most of them have no timing skill
I think this might one of the situations where if it works out for El Salvador in terms of helping the underbanked, then other countries might follow. I'm just not sure they are going to do it right away because most Presidents and Legislators are old and have no idea what crypto is all about. El Salvador's president is 39 years old and he owns BTC, thats quite rare. I dont think other countries will go towards that unless they have a model. And El Salvador will need a few years to prove this works
El Salvador will have a $150M Trust fund to remove the volatility risk from the people who do not want to hold bitcoin. This will be in the development bank However, there is nothing in the current law that just passed a few minutes ago that they will add bitcoin in the reserve. The President mentioned that could change in the future https://elitetrader.com/et/threads/...in-as-legal-tender.359247/page-7#post-5400484
Its definetly positive for BTC but I worry about the Novogratz 2018 mistake. He said 'institutions are coming' and he was about 2.5 years too early. Countries/Central Banks might be coming but they are probably even slower moving than institutions, they have elections to worry about, laws to deal with etc. But this will be a great case study, they will be using lightning so if the underbanked really gets banked and the country makes a bunch off their BTC holdings, then in a few years lots will want to copy it. But it might be a few years instead of months
There is also the cult aspect, something that you see in Scientology, Masonary, Opus Dei and others. El Salvador is now 'one of us' to the BTC fanatics. They have the residency program where people with 3 BTC get residency, they will also have lots of business accepting BTC so I expect lots of crypto tourists (usuall very rich folks) to visit there. Heck, I'm interested in going there 1 year from now to see how that is going and I wouldnt call myself a BTC fanatic. I expect lots of crypto business will want to open offices and do business there. The country is now a member of the cult so they will get the benefits of the cult, like other cults make it easier to get jobs when you are being hired by someone from the cult, etc
Yea, I heard that. Hope it works out well, lots of possibilities I think even the Tron foundation is interested in setting up an office there, who knows if Binance will be able to setup an office there and that invites other Cryptocurrencies firms to setup shop, i.e. Bitfinex for stablecoins issuance and onramp/offramp to US $ since El Salvador has a strong relationship with the US Federal bank, they get their US $ notes freshly minted and delivered to them Just so much possibilities, if they encourage all kinds of crypto-centric businesses such as mining firms, it could turn El Salvador into a Silicon Valley blockchain incubator, but as the brother of the president said, it's just the beginning, and they are looking at each step carefully [edit: on the subject of hiring, there was an interesting question and maybe I misheard or misunderstood it, but now, with a global remote work, if you can setup a consulting or software development shop in El Salvador, can they provide some kind of immigration support for it, just not sure if I understood the details of the question]