The adoption of Bitcoin has been very difficult for El Salvador economy
As AZCoin News reported, El Salvador will use part of its $4 million in Bitcoin profits to build a modern-looking pet hospital. This is one of the following steps of its president Nayib Bukele after they started recognizing BTC as a legal tender asset. Although many people support it, others think that Bitcoin is very difficult for the El Salvador economy. Here’s why.
El Salvador is having a hell of a time trying to integrate BTC into its economy
According to Steve Hanke, a prominent economist and vocal opponent of Bitcoin and cryptocurrencies in general, Salvadorans and the economy of El Salvador are having a hard time integrating BTC payments into their economy and financial system.
“The adoption of Bitcoin as legal tender has been a nightmare for El Salvador’s economy. Citizens regularly face technological difficulties and financial losses. El Salvador’s creditworthiness has also taken a hit – the country’s bonds have been in distress for over a month”, Hanke stated.
Source: Steve Hanke/Twitter
Users are facing technical problems and are losing money every day. As for the damage to the economy, the expert says the country’s creditworthiness has also been damaged: El Salvador’s bonds have been erratic for more than a month now. This is not the first time Hanke has posted negative tweets about Bitcoin, pointing out its volatility and claiming its underlying value is zero and susceptible to scams.
However, he is frequently critical of Bitcoin, posting memes similar to Tesla CEO Elon Musk, who uses them to support cryptocurrencies: Dogecoin and Bitcoin. However, after April, Musk announced that Tesla would stop accepting BTC for controversial reasons related to the carbon footprint of Proof-of-Work mining and promised to allow BTC payments again as soon as Bitcoin miners switch to green energy at least 50% of their operations.
This news comes as Bitcoin price has increased by more than $56,000 in the past 24 hours. At the time of writing, BTC is changing hands at $56,442, up more than 18% in the past seven days.
BTC/USD 4-hour chart | Source: TradingView
Accordingly, major BTC wallets (holding between 100 and 1,000 BTC) have purchased more Bitcoins in the past two weeks. The total amount of crypto they accumulated during the drop was around 85,700 BTC. That is the equivalent of $4,863,243,610 in fiat.
At the time, the world’s leading cryptocurrency was trading below $50,000, briefly surpassing this mark to hit a high of $52,536 on September 7. After that, BTC was hovering in the $41,000 region. Currently, these small and medium whales are holding 21.3% of the total Bitcoin supply.
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