[HN Gopher] El Salvador Made Bitcoin a National Currency. The Be...
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El Salvador Made Bitcoin a National Currency. The Bet Isn't Paying
Off
Author : jaredwiener
Score : 24 points
Date : 2022-07-05 19:30 UTC (3 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| upsidesinclude wrote:
| There is no loss on an asset until it is sold.
|
| They have not realized a loss other than for accounting, which
| may benefit their debt positions.
|
| Bitcoin is responding exactly like it has in the past, it also
| represents a better ~one year return than most investments. Now
| is a time to buy additional amounts as $13k-20k is the
| anticipated low range during the next 'slump' year
| jasonlaramburu wrote:
| >$13k-20k is the anticipated low range during the next 'slump'
| year
|
| What is the basis for this assessment? At least with a stock
| you can point to the underlying performance of the company.
| What factors affect BTC price other than sentiment?
| Ferrotin wrote:
| It's a liquid asset, so that's a false distinction.
| boc wrote:
| How do we actually know that El Salvador is buying BTC when they
| say they are? Is there a government wallet that we can see to
| confirm the presence of the national BTC reserve? I have a
| suspicion that the announced purchases aren't aligned with actual
| purchases, especially since we've seen that relatively small
| volumes of buying/selling will move the BTC market by thousands
| of dollars.
| impulser_ wrote:
| They don't buy on the open market like a normal person would.
| They buy from Coinbase or other large exchanges off market.
| Much like how large stock deals are done.
| duskwuff wrote:
| > They don't buy on the open market like a normal person
| would. They buy from Coinbase or other large exchanges off
| market.
|
| If they were being responsible about it (or, at least, as
| responsible as any government speculating in cryptocurrency
| could be), they would.
|
| But, according to Bukele himself [1], these purchases are
| made from an app on Bukele's personal mobile phone. I
| wouldn't be surprised at all if they were buying through an
| over-the-counter exchange.
|
| [1]:
| https://twitter.com/nayibbukele/status/1467333081505976323
| mike00632 wrote:
| The government of a sovereign nation is expending its
| treasury all through one person's cell phone?! Wild times
| we live in.
| mikhael28 wrote:
| Price is going to go down some more too. As the economy slowly
| but surely enters recession, and low net worth HOLDers sell their
| BTC to pay rent, the price will continue to go down. This system
| only works if people pump money into the system, not out of it.
| sec400 wrote:
| Those sure are a lot of predictions stated as fact.
| NicoJuicy wrote:
| It's already a ~ bank run. Not sure what could reverse that
| trend.
|
| Some discussion on eg.
| https://bitcointalk.org/index.php?topic=5403254.0
| panaffa wrote:
| Agreed
| mikhael28 wrote:
| It's not an unreasonable scenario. But yes, some 50/50 coin
| flip assumptions have been made.
| mirntyfirty wrote:
| I see very little incentives for the current "coin" holders
| and future potential "coin" holders to maintain a seemingly
| high "asset" price on btc.
|
| I'm open to a convincing argument otherwise but most of what
| I've observed is hand wavy and requires a religious leap of
| faith and conversion.
| boxmonster wrote:
| I was told there would be volcano powered Bitcoin mines
| BitwiseFool wrote:
| >"So far, Mr. Bukele's trades have cost the country an estimated
| $63 million in lost value, according to estimates last week by
| the magazine Disruptive, published by Francisco Gavidia
| University in San Salvador."
|
| A significant sum for any individual, but how impactful actually
| is this for a nation state like El Salvador? Not to blindly
| defend Bitcoin, but it seems like a tropical storm would inflict
| just as much, if not more, financial loss than this decision.
| And, it remains to be seen if this position will pay off in the
| long run.
| panaffa wrote:
| Not a big deal at all. These are long term reserve assets. They
| will not be sold perhaps forever.
| azekai wrote:
| "Not to blindly defend Bitcoin, but it seems like a tropical
| storm would inflict just as much, if not more, financial loss
| than this decision."
|
| I know you are just theorizing here, but c'mon. By embracing
| Bitcoin they did as much damage to their nation as if a
| _hurricane_ had hit? That seems like an incredibly poor choice
| for the people who are ostensibly in charge of keeping their
| nation safe and stable.
| BitwiseFool wrote:
| I was trying to put the loss in perspective, namely that this
| loss, while bad, is still an amount that El Salvador will be
| able to reasonably recover from. Not that I sensed there was
| doom and gloom about the situation, but this isn't the kind
| of large loss that will financially bog down El Salvador for
| the next decade or more.
| upsidesinclude wrote:
| There is no loss on an asset until it is sold.
|
| They have not realized a loss other than for accounting,
| which may benefit their debt positions.
|
| Bitcoin is responding exactly like it has in the past, it
| also represents a better ~one year return than most
| investments. Now is a time to buy additional amounts as
| $13k-20k is the anticipated low range during the next
| 'slump' year
| xur17 wrote:
| I wonder how much of this was a marketing play by El
| Salvador. As a result of making Bitcoin a National
| Currency, they've had their name in the news quite a few
| times, they've had more tourists than normal
| (cryptocurrency enthusiasts visiting, etc), and they've
| likely had increased investment in their country.
| jiriknesl wrote:
| In comparison with the hurricane, Bitcoin is going to fix
| itself (or at least it always did). And projected -$63M
| damage can be +$200M very easily. I think that the linked
| article will not age well. Practicly no article of this kind
| since the Bitcoin creation did.
| mike00632 wrote:
| "very easily"
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(page generated 2022-07-05 23:02 UTC)