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Bitcoin

El Salvador Bought $21 Million of Bitcoin as it Becomes First Country To Make It a Legal Currency (cnbc.com) 71

Posted by msmash from the how-about-that dept.
El Salvador bought roughly $20.9 million worth of bitcoin, one day before it formally adopts the world's most popular cryptocurrency as legal tender. From a report: In a series of tweets Monday, President Nayib Bukele revealed that the country had purchased a total of 400 bitcoin, the first step in a larger push to add the digital currency to its balance sheet. The tweets were posted a few hours apart. Based on the bitcoin price at the time of the tweets, the amount of the digital coin purchased totaled roughly $20.9 million. "Our brokers will be buying a lot more as the deadline approaches," he wrote. The price of bitcoin rose following the tweets and was trading at around $52,681.85 at 12:16 a.m. ET Tuesday. The posts came hours before El Salvador's bitcoin law, which was passed in June, took effect Tuesday. El Salvador is the first country to accept bitcoin as legal currency, which will work alongside the U.S. dollar. Proponents and critics around the world will be watching to see how this unprecedented experiment plays out.
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El Salvador Bought $21 Million of Bitcoin as it Becomes First Country To Make It a Legal Currency More

El Salvador Bought $21 Million of Bitcoin as it Becomes First Country To Make It a Legal Currency

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  • BTC at $52,700 (Score:3, Insightful)

    by h33t l4x0r ( 4107715 ) on Tuesday September 07, 2021 @01:58AM (#61770713)
    $21M isn't enough to nudge the price but the news might be.
    • It's OK, tomorrow it'll be $52M of BTC. Then on Wednesday it'll be $1M of BTC. Thursday, $186M of BTC. Friday, $25,000 of BTC. On Saturday, ...

      • Re: (Score:3, Funny)

        by mamba-mamba ( 445365 )

        Yes it is amazing how much the value of the dollar fluctuates. (Note to mods: consider +1 funny rather than -1 troll or -1 flamebait... thanks)

        • Re: (Score:2, Informative)

          by Black Parrot ( 19622 )

          It's sad when you have to explain things to the mods.

        • Re: (Score:2)

          by bn-7bc ( 909819 )
          I think it's BTC that fluctuates to much, compare USD and BTC against other currencies and see which fluctuates more, I think you'll find that BTC is the most volatile by far.

          • I think it's BTC that fluctuates to much, compare USD and BTC against other currencies and see which fluctuates more, I think you'll find that BTC is the most volatile by far.

            You might want to get your ears checked. It was a rather loud "whooshing" sound you missed.

      • Re:BTC at $52,700 (Score:5, Funny)

        by tlhIngan ( 30335 ) <slashdot&worf,net> on Tuesday September 07, 2021 @03:58AM (#61770859)

        It's OK, tomorrow it'll be $52M of BTC. Then on Wednesday it'll be $1M of BTC. Thursday, $186M of BTC. Friday, $25,000 of BTC. On Saturday, ...

        I think I found the perfect predictor of Bitcoin - the Windows file copy dialog!

        Just copy some files and look at the estimated time remaining. For accuracy, you probably want to use Windows 7 or prior, since Windows 10 seems to have broken the algorithm.

        • Re:BTC at $52,700 (Score:5, Funny)

          by neilo_1701D ( 2765337 ) on Tuesday September 07, 2021 @07:20AM (#61771155)

          It's OK, tomorrow it'll be $52M of BTC. Then on Wednesday it'll be $1M of BTC. Thursday, $186M of BTC. Friday, $25,000 of BTC. On Saturday, ...

          I think I found the perfect predictor of Bitcoin - the Windows file copy dialog!

          Just copy some files and look at the estimated time remaining. For accuracy, you probably want to use Windows 7 or prior, since Windows 10 seems to have broken the algorithm.

          Obligatory XKCD [xkcd.com].

      • That's the problem of using bitcoin and other "investment" instrument as currency. So if the price goes up, then inflation goes up, if the price goes down, you get deflation. And this is far worse than with most traditional currencies. Sure, point to Zimbabwe dollar as an egregious counter example, but most currencies are stable. Bitcoin is notoriously unstable - sure, it goes up but going up rapidly is NOT stable. As an example, with the price of the US dollar goes up internationally, it has consequen

    • Re: (Score:2, Interesting)

      by pjt33 ( 739471 )

      Yes, telling everyone "We're going to be buying lots of Bitcoin" isn't the way to get a good deal as a buyer, and if it's a pump-and-dump then they're not heavily enough into it to make a profit that would really register on the national economy.

  • El Salvador (Score:1, Informative)

    by backslashdot ( 95548 )

    A bigger thing to learn from El Salvador is how they enacted tough-on-crime policies that reduced homicides from 103 homicides per 100,000 people in 2015 (highest in the world) to 20 per 100,000. That's a decrease of 5x in 5 years! Remember 2014/2015 when large numbers of El Salvadorans fled to come to the US border .. that isn't happening anymore partially thanks to those crime reductions.
    References:
    https://insightcrime.org/news/... [insightcrime.org]
    https://foreignpolicy.com/2021... [foreignpolicy.com]

    • Re: (Score:1, Offtopic)

      by h33t l4x0r ( 4107715 )
      Mm-hmm, We're going to have to start strategizing for when MS13 finally moves in next door. I don't know what they're waiting for, they know Biden's president now, right?

    • Re:El Salvador (Score:5, Informative)

      by tofus ( 201424 ) on Tuesday September 07, 2021 @05:03AM (#61770941)

      Official crimerates in North Korea are astoundingly low as well. That does not mean we can 'learn' anything from them.

      El Salvador is run by gangsters, and their embrace of bitcoin fits the profile. While this may fill the pockets of some corrupt government officials, it will not help the El Salvadorian people. In fact, they will probably be exploited even further. Being at the bottom row of a pyramid scheme is not the ideal place to find yourself in.

    • and it doesn't sound like Tough on Crime is what did it. The drop in homicides was nationwide but the increased police presence was of limited scope.

      The article concluded that it's most likely just due to lock downs reducing human interaction and that the 2 major gangs are in a cease fire.

      That won't last of course, and the country needs a stronger economy so that folks aren't joining gangs.

      • And the bitcoin can only hurt their economy. It's like saying you can solve your economic woes by buying lots of Microsoft stock and paying workers in shares from it. I mean, what can possibly go wrong? Forget Microsoft actually, that booming Enron stock is the way to go! Hmm, can do better still, just pay workers stock in their own companies, which just encourages them to work harder, and after all our company's stock will never go down!

  • By being the only country in the World accepting bitcoin, El Salvador wants to attract money from all those people that became new rich thanks to crypto. And money laundering, drugs, etc.

    Any other motivation for this movement is dumb (even the previous one is highly questionable).

    • Re:Attract money (Score:5, Funny)

      by h33t l4x0r ( 4107715 ) on Tuesday September 07, 2021 @04:43AM (#61770911)
      So bitcoin is dumb? You see, this is why I come to Slashdot. I just can't find this level of insightful analysis anywhere else.

    • None of that. They want to ease personal remittances, which add up ~25% of El Salvador's GDP.

      Now, whether Bitcoin is better or not than Western Union or regular bank fees, it's still to be seen.

      • They are pretty far down the list on total remittances received. It seems like a lot because their economy is so small. Interesting to see two large EU countries in the top ten list. Wonder what those two have in common?

        The top harvesters of foreign remittances are:

        Country
        Most Recent Year
        Most Recent Value (in US$)

        India
        2020
        83,149,172,934

        Mexico
        2020
        42,880,323,453

        Philippines
        2020
        34,913,342,999

        Egypt, Arab Rep.
        2020
        29,602,900,000

        Pakistan
        2020
        26,108,000,000

        France
        2020
        24,481,658,776

        Bangladesh
        2020
        21,749,701,161

        China
        2

        • Yeah, and El Salvador has 0.4% the population of India. There's a reason why these figures get normalized by GDP/population.

          The overall point is, personal remittances are a significant part of El Salvador's economy. Anything facilitating these is obviously perceived as a net win for the country,

        • What counts most is the % of GDP the remittances represent. In 2019, remittances varied from about 400 to 550 million per-month. Big drop in 2020, but it jumped to 600-700 million/month at the end of 2020 through to now. El Salvador's GDP has been between 24 and 27 billion/year from 2019 to now, so remittances represent roughly one quarter of the nation's GDP. In 2015, remittances became the single largest component of Mexico's GDP, beating oil and tourism.

          Honestly, I don't see how that can be called

      • Whenever you hear something about a blockchain token being good for something, assume it's just an excuse for the token as a speculative asset. It doesn't matter if you believe it, if you think others will believe it you can get rich... or at least try. For anyone actually getting rich on it, there needs to be someone taking at least as much loss, and anyone with sense knows that the "excuse" use of it will amount to a rounding error.

        That goes for the original token (bitcoin) and the original excuse (sendin

    • Why would anyone spend a bitcoin unless desperate? It earns more when it is idling in the wallet. That possibly is the motive of El Salvador - to build its coffers.

    • Soon all those bitcoin fans will be emigrating to El Salvador. Holding my breath to see how that utopia thing works out.


  • El Salvador has purchased less than 1000 of their GDP equivalent of Bitcoin. A huge investment or a spit in the ocean?

    MAny do not seem to have registered a 50% BTC price drop, they see the price rising and BS new items like "BTC becomes legal tender" and think BTC is going to $200k

    Statistically, based on market structure and BTC price history, it is unlikely that BTC will form a new all time high this year. Very likely the people buying here will also see a 30%-50% drop and will be left scratching their

    • Re: (Score:2, Insightful)

      by gnasher719 ( 869701 )

      MAny do not seem to have registered a 50% BTC price drop, they see the price rising and BS new items like "BTC becomes legal tender" and think BTC is going to $200k

      That may happen. What it means is that someone will pay $200k for a worthless bitcoin that someone else bought for $50k two weeks ago, or more likely, that someone else created at no cost whatsoever five years ago. Eventually they run out of idiots willing to pay $200k, and the price drops down to $190k. And then they run out of idiots willing to pay $180k, and so on and so on.

  • This won't help the country or their citizens.
    • Comment removed based on user account deletion
    • I don't know whether or not El Salvador's experiment will succeed or fail. But the president of El Salvador is extremely popular. I'm not sure why he's so popular if he's a gangster. There's a lot of FUD being repeated; much of that can be traced to the International Monetary Fund and the U.S. administration who obviously have an interest in keeping El Salvador only on the dollar. So I'm waiting to see how this experiment plays out.

      From what I can tell, most people in El Salvador don't really understand

  • The question is... when did they buy the $21M in BTC? Did they buy it on the dip? Because if they did that $21M just blew up....

    And if that is true, well, they just grew their treasury.

  • This will be funny when the next delusion crash comes around, and perceived value is adjusted to the real value again.
    Especially since the real value is zero outside scam baiting contexts.

    (I like the idea of a blockchain. It's the fact that the act that is supposed to give it value, namely "mining", is in reality something entirely worthless. Yes, the electricity was valuable. But it turned it into something entirely worthless: Hashes of random shit. It's the digital equivalent of literally burning money, a

    • What "Equadorian", you mean Ecuadorian? How did they get sucked into this? FYI their currency is the (yes, US) dollar! So be careful with what you wish for.

  • El Salvador bought 400 BTC, 0 Bitcoin (BSV)..
  • for an entire nation? I'm sure it will work out great. A nation having a currency whose supply isn't controlled by the nation, and thus whose value fluctuates wildly according to external factors, is a good idea. Just ask Greece and Spain.
    • Comment removed based on user account deletion
      • And that is a valid point! I'm not really sure how that has worked out for them so far (though I'd imagine if it were "really well", they wouldn't be where they are), but it didn't work so well for Argentina. Hell, handing over monetary policy to the EU didn't work so well for all its member nations. It's risky for a nation to give up control over its monetary policy and supply, and until now all the ones that did so went with a strong and stable currency - dollar or euro. Bitcoin is all over the place

  • It seem like the only people still advertising on youtube are the crypto scammers, they now make up about 80% of the adverts I see. I've taken to letting them play out on mute so they still have to pay the content providers, while putting my attention to another tab, just like browsing slashdot.

  • BTC is on freefall right now. -14% to $44k, and still dropping...

    • I know, right? Reminds me of those silly people who bought BTC at a then-ATH of $30 before it "freefalled" to $17. I bet those suckers who held until today feel pretty bad about their unwise investment!

      • Ah, yes, the hallmark of a great investment. To hold on an asset after it devaluates 50%, because it might just go up again sometime in the future.

        A lot of folks in the cryptocurrency multiverse really behave like gambling addicts.

  • Not to imply that leaders in El Salvador are less trustworthy than those elsewhere but crypto sure is a good way to obfuscate the movement of money.

    • Not to imply that leaders in El Salvador are less trustworthy than those elsewhere but crypto sure is a good way to obfuscate the movement of money.

      Not really. It's a public ledger. It's arguably more transparent than banks moving "dollars" around. It's definitely more transparent than cash.

      • That part is true, a lot of information is exposed if the identity is known. Though the address could be held by a pseudonym and a single pseudonym could hold multiple accounts.
        A less than scrupulous public servant could have crypto transferred to a pseudonym under his control. An audit would have to trace the transaction back to the pseudonym.
        A password could also be "forgotten" like the situation with Coinbase.

        “As an additional firewall, a new (address) should be used for each transaction
  • How much for a papusa?

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