El Salvador, which last year became the first country in the world to adopt Bitcoin as legal tender, has just ‘bought the dip’.
The country’s president, Nayib Bukele, confirmed on Twitter that his government has made its largest ever purchase of the world’s largest cryptocurrency by buying 500 coins at an average price of $30,744 – which is down 50% from the November all time high.
He was proving the point I told various media outlets yesterday that as typically happens, we except this dip to be used by ‘whales’ – who are individuals or entities that hold enough cryptocurrency to have the potential to move currency valuations – as major buying opportunities.
This is because the robust fundamentals of the world’s largest cryptocurrency, including being a digital, borderless, viable, decentralised, tamper-proof, unconfiscatable monetary system remain the same.
Yet, I’m sure in the coming days we’ll see some more low-key hysteria from the International Monetary Fund, which has been highly critical of El Salvador’s pioneering approach to trying to boost their own economy through innovative financial solutions.
It’s the same IMF which this week has also taken issue with the Central African Republic, the world’s second country to adopt Bitcoin as legal tender.
Reacting to the CAR’s decision, the IMF warned the African country’s adoption of Bitcoin posed legal and economic challenges.
“The adoption of Bitcoin as legal tender in C.A.R. raises major legal, transparency, and economic policy challenges. IMF staff are assisting regional and Central African Republic’s authorities in addressing the concerns posed by the new law,” the IMF reportedly said in emailed responses to Bloomberg.
Once again, the fact that the global fund lender is asking a pioneering sovereign nation to drop a future-focused financial policy that attempts to bring it out of financial instability and a reliance on another country’s currency shows the institution to be on the wrong side of history.
Like most legacy financial institutions, the IMF is clearly worried about losing relevance and influence they have enjoyed for decades as the inevitable future of finance will also include powerful, digital, borderless, decentralized systems that are out of their control.
It is therefore perhaps unsurprising that they are using the age-old weapon of warfare: misinformation.
Institutions like the IMF should be working with developing economies to find a viable path out of debt and financial instability in ways that are future-focused. Past methods, clearly, haven’t been as successful as they should have been.
Therefore, it’s time to look ahead, not back. This is what El Salvador appears to be doing with absolute, but considered, conviction.