There is no sign of President Bukele becoming bearish on bitcoin. In fact, quite the opposite is happening.
The self-proclaimed “CEO Of El Salvador” is making headlines again. President Nayib Bukele has tweeted some bullish comments on bitcoin. Specifically, he compares the number of bitcoin that will ever be mined and the number of millionaires in the world. He argues that not every one of the 50 million-plus millionaires in the world will be able to own a single bitcoin, which will ensure its scarcity. According to Bukele, there isn’t enough “for even half of them.” Hence he believes a “gigantic price increase” is inevitable, presumably as more people buy bitcoin.
Bukele shows no signs of retreating into bearish territory. This, even after the International Monetary Fund issued a plea for El Salvador to rescind bitcoin’s status as legal tender due to concerns around its impact on the country’s financial stability and investor protection. Bukele mocked the IMF’s concerns in a tweet. Popular bitcoin maximalist and TV broadcaster Max Keiser has predicted that a second South American country will adopt bitcoin as legal tender by the second quarter of 2022. Of the IMF’s warning, Keiser said, “The IMF’s days are numbered .” He further added, “Only bitcoin is money. Everything else is centralized garbage.”
Where is the money coming from?
A little over a week ago, Bukele tweeted that he had bought 410 BTC, bringing the country’s total BTC holdings to 1801 BTC. He began buying bitcoin in Sep. 2021 when it was trading at $50K. The government’s bitcoin address is a secret. It has $150M in a state bank to fund bitcoin purchases.
BTC has lost $10k of its value between Jan. 20 and Jan. 25, 2022, resulting in significant dollar losses on El Salvador’s BTC stash. However, a steep decline in the South American nation’s overseas dollar bonds meant it had the worst dollar bond performance of any country. This is because Bukele’s economic policy rattled investors in 2021.
Nathalie Marshik of Stifel Nicolaus & Co., a financial services company in New York, predicts that the country will have a $1B shortfall in 2022. She questions where the money is coming with which to trade BTC. She says, “It’s hard to justify a government trading such a risky asset with taxpayers’ money in such opaque circumstances.
On a lighter note, in keeping with the price decline of BTC and other cryptocurrencies, Bukele sported a fake McDonald’s uniform on Twitter lately. There is a joke that when crypto prices drop, day traders need a real job to pay bills. That is, flipping burgers at McDonald’s.
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