NOIDA (CoinChapter.com) – Bitcoin purchases in El Salvador are now in surplus, President Nayib Bukele boasted in a social media post this Wednesday.
El Salvador’s entry into Bitcoin in 2021 marks a drastic departure from the norm. Under the leadership of President Nayib Bukele, the Central American country has taken a step no other country has dared: adopting Bitcoin as its fiat currency.
President Bukele’s decision was not simply a policy change, but a statement that challenged conventional economic wisdom and the status quo of Western capitalism. However, this decision received a lot of criticism from various analysts, organizations and journalists.
Bitcoin Profit in El Salvador
Bitcoin operations in El Salvador began amidst skepticism from the international community. Critics have warned of volatility and potential financial instability. However, El Salvador’s recent Bitcoin investment return announcement paints a different picture.
Vietnam reported a net gain of $41.6 million from its Bitcoin holdings, a gain of more than 40%. President Bukele boasted about the development on social media. He challenged critics who questioned the government’s decision to purchase Bitcoin with its reserves.
The reversal came after the recent rise in the price of Bitcoin, which validated Bukele’s strategy of holding the digital currency through fluctuations. Although minor in the grand scheme of global finance, this benefit is significant for El Salvador.
It is very telling that the authors of that hit piece – the “analysts”, “experts” and “journalists” – are now completely silent. Next time they lie about El Salvador again, remember this.
President Nayib Bukele said:
These gains demonstrate the potential for cryptocurrencies to contribute positively to national economies. This is especially true when traditional financial systems offer limited options for growth and innovation.
“cry harder,” President Bukele to Schiff.
Despite positive proof that Bitcoin can be a store of value for the country, Bitcoin critics have continued to criticize President Bukele.
After El Salvador’s president celebrated his country’s acquisition of the cryptocurrency on Twitter, Goldberg and Bitcoin critic Peter Schiff disputed his claim. Schiff suggested to President Bukele that he sell El Salvador’s Bitcoin holdings and realize the profits before talking about it.
The President of El Salvador advised Schiff:cry harder.”
After El Salvador adopted Bitcoin as its fiat currency, Schiff and Bukele criticized each other. For example, in January 2022, Schiff shared another social media post claiming:Bitcoin is bad, gold is good. no one likes BTC”—This is the usual call of the gold bug.
Later that year, a bank owned by Peter Schiff was shut down by Puerto Rican authorities. President Bukele took the opportunity to cheekily respond to Schiff’s six-month-old post.How’s the bank doing?“
Criticism of Nayib Bukele’s Bitcoin decision
The El Salvador government’s decision to invest in Bitcoin and adopt it as fiat currency has been met with significant criticism. International organizations such as the International Monetary Fund (IMF) have expressed concerns about the macroeconomic, fiscal and legal implications of the move.
The adoption of Bitcoin as fiat currency raises numerous macroeconomic, financial, and legal issues that require very careful analysis.
IMF spokesman Gary Rice said:
Economists and financial analysts have pointed out the risks associated with the volatility of cryptocurrencies. Moreover, real adoption of Bitcoin faces obstacles. There have been reports that a significant portion of the population and businesses have been hesitant to adopt cryptocurrencies for their daily transactions.
Critics have also highlighted the broader challenges of integrating digital currencies into national economies, questioning their long-term viability and impact on financial stability. Recent returns from Bitcoin investments have been met with criticism and skepticism from Western financial institutions and economies.
However, the true measure of success will depend on the plan’s long-term impact on El Salvador’s economic stability, financial inclusion, and widespread acceptance of cryptocurrency.