The world of the financial market is essentially about buying a stock market asset at the bottom to get the most profit from it on the upside. It is in the same spirit that the president of El Salvador, Nayib Bukele jumps on the moments when bitcoin is the cheapest to increase the reserve of the country. However, during this time, the detractors of the bitcoin do not fail to carry out a lawsuit against this legalization of the bitcoin.
Guilty of legal bitcoin bad idea
On May 10, 2022, Norwegian Robin Wigglesworth published an article in the Financial Times that sued the Salvadoran president. He would mainly blame him for having stored far too much bitcoin. His article refers directly to the idea that Salvadoran President Nayib Bukele is digging the grave of El Salvador, a country already in enough difficulty, with these cryptocurrency trafficking. He therefore takes the enormous risk of pushing the country even further into his situation with a stock of around 2,280 BTC.
It also evokes the characteristics of the country on the economic level, to better understand the absurdity of this race for bitcoin. Thus, he reveals that the GDP of El Salvador is barely at 3,800 dollars per capita. The size of its public debt represents nearly 85% of its GDP. During the last 6 months, the country would have recorded a loss of nearly 28.9 million dollars.
Words addressed to the defense
This article mentioned above comes at the perfect time for cryptocurrency critics. It is put online at a time when all the cryptocurrencies including bitcoin have experienced a rather brutal decline. In the case of bitcoin for example, it fell below the $30,000.00 mark. Taking into account the 2,280 BTC acquired for a sum of $101.5 million, we can deduce that the Salvadoran president bought his stock of bitcoin at around $44,500. The acquisition of this cryptocurrency is today at 29,776 dollars, which represents a loss of 14,700 for El Salvador.
However, it is important to consider whether these criticisms will still be valid if the value of bitcoin exceeds $44,500 and El Salvador recovers a good return on investment. The price of the cryptocurrency has already touched the $46,000 line in 2022. Nevertheless, this data alone is not enough to be enthusiastic about bitcoin, because since this period it has never close enough to $50,000. Indeed, bitcoin has been experiencing strong downward trends for a few months now.
The future of bitcoin
Many opinions are unanimous on the fact that it is completely useless to hope for a potential increase in the value of bitcoin in the long term. Indeed, bitcoin has experienced many declines that have been quite brutal. These falls in the value of bitcoin are very good arguments to justify that it is extremely dangerous to invest in this cryptocurrency.
Despite everything, bitcoin still presents enough arguments in its defense. For example, we cannot omit the existence of a completely decentralized network which is behind the scenes of bitcoin ensuring low-cost transactions. This network, whether we like it or not, has perfectly demonstrated its solidity up to now. Additionally, this decentralization ensures that the cryptocurrency settings cannot be changed by anyone or a select group of people.