1. El Salvator did not loose money. Those are unrealized “losses”, 2. market cycles are normal and expected, if you thought “crypto will only go up from here”, you are delusional, 3. Bukele just needs to be patient, the fundamentals did not change.
They still own 2301 BTC, and there still won’t ever be more than 21 Million. Adoption, hashrate, use cases, etc. all improved, and continue to do so. There will be another market cycle.
Artificial scarcity does not imply value, I can create a token from thin air, make the supply only 3 tokens, and start saying it will gain value because there will only ever be three tokens. Also it's arbitrarily divisible to a lot of decimal points so that argument makes even less sense.
My observation is that many people do not respect history, and they only think in terms of how markets behaved during their small lifetime. For example, the Fed dominating markets with a foolish policy of bailing out the poor performers and flooding the market with cheap money and waterfalls of debt has been done by governments in history with catastrophic results.
But a new ERC-20 token has so many downsides compared to Bitcoin.
To name just one, lets start with the distribution. How would you get your token in as many hands as there are currently Bitcoin holders?
There will only be one "digital gold" just like there was just one analog gold. And so far, there is no contender to Bitcoin to be seen anywhere.
Notice for instance how fewer and fewer people are interested in selling Bitcoin the lower it goes. But I bet you'd love to get people to believe it's worthless so you can get it at a discount. Again, this proves that Bitcoin indeed has value.
As for artificial scarcity; well, artificial or not, at least Bitcoin has scarcity. Obviously artificial trinkets in the form of worthless metal coins, paper notes, or numbers in a bank's database, does not have any meaningful scarcity compared to Bitcoin.
Btw, whatever scarcity there is for fiat is also just as artificial, except its rulers and influencers can make as much of it as they like depending on their mood that day. Not so with Bitcoin. Artificial or not, its supply is hard capped at 21 million coins.
Now, what is El Salvador's plan to pay that debt? They're going to issue a new billion dollar Bitcoin backed bond. What do they say the yeild of this bond will be? According to the developer of the financial instrument - 146% Yield. The attempts to issue the bond have continually stalled. Who do you think is going to pour money into that with the crypto market in it's current state?
It doesn't matter if you think Bitcoin is going to eventually change the world, because El Salvador can't stay solvent long enough to see that happen. They're going to default on their debts and there's no fucking way the IMF is going to step in whilst El Salvador is doing this ridiculous stuff. So the actual citizens of El Salvador are about to face a massive economic problem.
While I wouldn't bet against it, there is a high likelihood that BTC was a product of the same funny money it was meant to counter. Whether it can sustain its value in the absence of massive QE remains to be seen,
That risk is real, and I'm not sure El Salvador can just hodl forever
1/ In the same way that as long as I don't sell my GME share it's an unrealized loss. It's something I can afford to do as an individual because I can throw a hundred bucks away for the lulz. It's another thing to be a country and to make Bitcoin a mandatorily accepted currency and gamble your people's money away for the lulz.
2/ You've seen how cryptocurrency has behaved in the past ten years, and you think "market cycles" are a thing, in this domain ? There is nothing cyclic about cryptocurrency prices. There is nothing rational about these prices. It'll go back up the next time there's a successful scam managing to raise enough money to buy 2 minutes of Matt Damon telling you you're a limp dick for not putting it all in $LUNA, but it'll still be propped by nothing.
3/ "The fundamentals are here" is peak crypto apologist in denial speak. There are no fundamentals to bitcoin's current price, aside from "funny computer money goes up". All of Bitcoin's current value is propped up by speculation, lies (mmmh delicious unbacked Tether being a massive cause for the rise of its value).
It’s massively irresponsible for a leader to gamble with his people’s money like this.
Yes there are things that happen when they do that, but it is functionally impossible for the US to run out of dollars.
Which is what El Salvador did untill recently. They still do, but no longer exclusively.
Yes, yes indeed. That is a terrible idea. Though there are circumstances when it might not be the most terrible of terrible ideas and the alternative is worse. But no sane country that is not already in dire straits should do that.
There are plenty of countries with a higher national "debt" ratio that provide much better quality of life to the bottom 95% of the population than the US.
The problem the US has is that it is one of the largest creditors of its own liabilities. The US prints its own money to issue itself debt with it. History's biggest ponzi.
Of those with Debt:GDP higher than the US, who exactly are you aspiring to in terms of quality of life? https://worldpopulationreview.com/country-rankings/debt-to-g...
Neither of these are true for El Salvador and BTC.
The US & IMF don't bail out people out of poverty, they only acquire countries but economically.
When you are against them, you're just a Cuba, a Venezuela, or an Iraq.