Is El Salvador Up? | Hacker News Reader

Is El Salvador Up?

iselsalvadorup.com

180 pointsbelltaco180 comments

I’m about as far from a crypto defender as you can get, but I think this page misses the point. If El Salvador is planning to use Bitcoin as a medium of exchange, which by all accounts they are, their being “up” or “down” must be measured by the size of the economic activity that Bitcoin allowed them to facilitate. That figure is harder to get at.

Viewed this way, the additional purchases which seem foolish and laughable might even be signs of success: perhaps Bitcoin business is booming so hard they need to expand their reserves?

To be clear, I highly doubt that’s the case here, but if we’re going to assess success we should at least try to steelman their position. There’s plenty to mock about this change without taking cheap shots.

Maybe the larger point is that bitcoin is too volatile a currency to be used as a medium of exchange? Surely they must be holding on to a decent amount of BTC and as such lost value, if not the government itself, then at least the country as a whole.

How Bitcoin really facilitate anything ?

They're not trying to use Bitcoin as a medium of exchange.

They're trying to funnel people into their own centralized crypto app, where people may (or may not) be allowed to send Bitcoin via the Lightning Netowrk.

They're investing FX reserves in Bitcoin. Their imports are not priced in Bitcoin. Bitcoin going down relative to the currencies they import in hurts El Salvador's ability to finance them. Which raises borrowing costs [1]. Which leads to exporters demanding earlier payment [2].

San Salvador has less than three months' imports in reserves [3][4][5]. Their Bitcoin experiment has scared off crisis lenders [6]. There is no good ending for them right now.

[1] https://www.reuters.com/markets/europe/crypto-crash-leaves-e...

[2] https://fred.stlouisfed.org/series/SLVBCAGDPBP6

[3] https://tradingeconomics.com/el-salvador/imports

[4] https://tradingeconomics.com/el-salvador/foreign-exchange-re...

[5] https://data.worldbank.org/indicator/BN.CAB.XOKA.CD?location...

[6] https://www.imf.org/en/News/Articles/2022/02/15/cf-el-salvad...

Thanks for the sources to read further in the topic! I was always curious to know how their “experiment” was going to turn out and it seems like the results so far aren’t good

it's been 100% an utter disaster

> was always curious to know how their “experiment” was going to turn out and it seems like the results so far aren’t good

They were in a bad position to start with. There was no happy ending even if they'd done everything right.

But had they spent the boom years borrowing cheaply where possible, renegotiating and paying off expensive debt where necessary, moderating fiscal expansion and fighting violence around their tourist centers, they would have had better options. Instead, they voted in a magician.

San Salvador is between a rock (currency crisis prompting food and fuel shortages) and a hard place (austerity and an IMF loan).

Minor note: it's El Salvador (The Savior), not San Salvador (Holy/Saint Savior).

https://en.m.wikipedia.org/wiki/Metonymy

San Salvador is the capital, like saying Moscow to refer to Russia.

Thanks! I was trying to remember the term.

El Salvador is the country, "San Salvador" is standing in for "The Government of El Salvador". Or the leadership, executive, etc.

Like when news articles say, "U.S. trade deficits are widening. Washington appears to be pursuing domestic development efforts rather than the protectionist measures floated by many".

The president of El Salvador is buying Bitcoin on his cellphone. There is no governance over these millions and it isn't going to end well.

Currently, Bitcoin adds zero value, even if it was used for every single transaction in the country.

Currencies are not money because they don't store value. Bitcoin was a promise to be money in the full sense.

It's ability to store value is questionable, since it became a highly speculative and fraud facilitation asset. And the other aspects of being money are worse than currencies.

the same argument can be said about literally every non-crypto currency. A US dollar doesn't have any "value" other than the small amount of heat you get if you burn your paper bills.

Hey, at least you didn't say "fiat". That's the magic word for "stop reading this comment".

Once a month or so I search Twitter for the phrase "fiat maximalist" to find the dumbest cryptobro takes.

> same argument can be said about literally every non-crypto currency. A US dollar doesn't have any "value" other than the small amount of heat you get if you burn your paper bills.

Or the food and fuel one can import with it, which one can't with Bitcoin.

If you offer high enough margins and volume I guarantee someone will import food or fuel for you in exchange for bitcoin.

Actually there are many reasons.

You pay taxes in USD, USD is legal tender for debts, you are incentivized to borrow in USD and finally because the dollar is widely accepted even beyond the borders of the US.

Money is really only meant to be a relationship between people which tracks how much they owe each other, the value isn't derived from money itself but from the network effects of many humans engaging in economic activity.

5% inflation obviously ruins the store of value aspect but it hasn't stopped anyone from sending or accepting inflating money. The idea that a merchant would refuse USD because it lost 95% of its value compared to eighty years ago or whatever is unheard of and doesn't seem to bother merchants as long as they can re-adjust prices quickly enough.

The last one is the most important. If everyone in El Salvador accepts Bitcoin then Bitcoin will act as money just like any other currency.

El Salvador has a trade deficit and can't print USDs; part of the point of adopting BTC was to allow Salvadorans abroad to send money into the country without paying wire fees.

I bet they could’ve put together an agreement with TransferWise or OFX to issue digital wallets to citizens and expats for facilitating more efficient remittance at scale for less money than what they’ve wasted on crypto losses.

To put the numbers in context:

- El Salvador has spent $104M on BTC

- They have lost about $47M on their investment

- They have a GDP of about $28B [1]

- They have an annual government budget of about $5.6B [2]

So they've blown about 1% of their annual budget on BTC. Far from catastrophic.

[1] https://tradingeconomics.com/el-salvador/gdp

[2] https://tradingeconomics.com/el-salvador/government-spending

> So they've blown about 1% of their annual budget on BTC. Far from catastrophic

The Bitcoin decision is single handedly marching San Salvador into a currency crisis [1]. Food and fuel are among their top imports, so that likely leads to political crisis.

[1] https://news.ycombinator.com/item?id=32487630

> The Bitcoin decision is single handedly marching San Salvador into a currency crisis

This is an extreme oversimplification. The issue is that decision to make Bitcoin legal tender has put El Salvador at odds with the IMF. Arguably they would have been at odds anyway, and the IMF is simply using this issue as leverage (as well as to foment internal political divisions). The issue is primarily political (not economic!), especially considering the small amount of money invested in relation to the country's overall finances.

When your lender of last resort tells you to jump, you say “how high?” or starve. El Salvador needs the IMF more than the IMF needs El Salvador.

It’s political in the sense that the IMF doesn’t want to throw fiat at an irresponsible government that is gambling away sovereign dollars. Good money after bad and all that.

"Appease the moneyed classes or starve" doesn't seem like a very just way to run the world. Granted, the IMF isn't the arbiter of justice, but punishing the PEOPLE of El Salvador for the actions of the local ruling classes is just cruel. Even if the "financial trouble" could lead to "regime change", we're obscuring the horrors for the citizenry behind some smarmy journalism words.

So stage a coup and put adults in charge instead of a crypto bro gambling away a nation’s sovereign funds. I agree the IMF should assist the El Salvadoran people, but that’s not currently an option being presented.

> So stage a coup

Have you ever stayed a coup? It is very very difficult. And historically, the consequences of coups have been mixed.

It's like people saying the Russians should just overthrow Putin...

> that decision to make Bitcoin legal tender has put El Salvador at odds with the IMF

It also prompted downgrades from ratings agencies, credit spreads to widen in the international bond markets, took bilateral bailouts from e.g. the World Bank or the U.S. (its primary remittance and export provider) off the table, et cetera.

> small amount of money invested in relation to the country's overall finances

$100mm in a $29bn economy is a lot. Scaled to America's $24.9tn [1] GDP, it's $85bn. It's also something like 4% of their FX reserves and close to 10% of the money they're asking the IMF for.

[1] https://www.bea.gov/sites/default/files/2022-07/gdp2q22_adv....

single handedly marching San Salvador into a currency crisis

How can they be having a currency crisis when they don't have a currency? It's more accurate to say they're headed for insolvency or something.

> How can they be having a currency crisis when they don't have a currency?

You're right. It's technically a balance of payments crisis.

At the brink, and from outside, they model similarly. Deposits in El Salvador banks start behaving like a currency as international depositors haircut against the risk of seizure and capital controls. From inside, they're different as the long inflationary phase of a currency crisis is truncated to a default and reset.

This makes it sound as if El Salvador should have introduced something similar to the Chiemgauer in Germany. Basically it is a local currency that keeps money within the region, it has a circulation safeguard which is supposed to prevent stagnation which is how most complementary currencies die. The interesting part however is that it is 100% backed by euros. The circulation safeguard and the trade in fee make the Chiemgauer just a tiny bit less valuable than actual euros. If El Salvador implemented such a system it would be dollarized but at the same time have a slightly devalued exchange rate vs the dollar which discourages imports and encourages exports to the US.

What El Salvador is experiencing is basically the North American equivalent of the Greek economic crisis.

1.8% of a national budget is a huge deal though. For the US government that would be 2 - 3 NASAs. Not catastrophic but that doesn't mean we shouldn't push back against national governments gambling with their treasuries on purely speculative assets.

Nope. As a Salvadorean the "they've blown about 1% of their annual budget" argument irritates me...

First of all: "annual government budget of about $5.6B" this is misleading, the government is 100% reliant on NEW debt to operate, there is NO "disposable income" not even a penny...

Heck, the goverment just approved a new $650M debt package to execute a "last resort" strategy and try to pay old debt by buying bonds expiring on early 2023 at below face-value price, because lenders have pretty much lost faith on the goverment having the capacity to pay, so they are "cutting loses".

1% may look like nothing at face value, but when you are even a little bit informed about Salvadorean reality you know that $104M is A LOT of money for a country where the ICUs of the most important hospital of the public network get FLOODED every time there is a couple of hours of rain [1] and rebuilding the whole hospital would cost $170M...

[1] https://www.elsalvador.com/noticias/nacional/tormenta-bonnie...

To be clear - not saying this was a good decision on the government's part. I agree it seems pretty poorly thought out.

Appreciate all the other info!

1% of the annual budget of a country is a HUGE amount. There are likely entire ministries that only get 2-3% of the budget, or less.

Here are some other useful stats:

Their credit rating has been downgraded to CCC (ie DEEP JUNK)[0]

They're looking at financing needs off 15% of GDP:

>Both JPMorgan and the International Monetary Fund warn the country is on an unsustainable path, with gross financing needs set to surpass 15% of GDP from 2022 forward — and public debt on track to hit 96% of GDP by 2026 under current policies. [1]

[0]https://www.fitchratings.com/research/sovereigns/fitch-downg...

[1]https://www.cnbc.com/2022/06/25/el-salvador-bitcoin-experime...

The US hit public debt of 135% 2 years ago. The US has not had an annual surplus since 2001 and in the last 2 years had a deficit of about 3T(!).

I know, better rating, world reserve currency, etc. Just adding some context to "fiscal responsibility".

> They have lost about $47M on their investment

They haven’t lost anything unless they sell.

If they're looking to make BTC an actual currency, they have. Its purchasing power has been cut in half.

Not defending their Bitcoin decision, but I think an important bit of context that is easy to miss is that small developing countries with not too many relevant exports (besides tourism) or financial sector, especially those close to the US, don't have an enviable set of options when it comes to FX regimes.

Either you try to exercise 'fiscal discipline', meaning that you effectively have to answer to Washington pundits and Wall Street Bankers wrt to your economic policies, or you try to sustain an unmaintainable dollar peg and eventually have to ask for an IMF bailout, or you let your currency float and risk a spiral of devaluation and inflation. Argentina has gone pretty much full circle on those options, ask them how it feels.

You can peg low rather than pegging high - this helps develop your exports industry.

Even just speculating about a peg substantially below the current exchange rate sounds like a great way to send your exchange rate downwards.

And low exchange rates only help with exports if you have an export industry (tourism reacts to a lot more factors than just prices - the instability coming from a currency crisis may not help, eg). And higher prices for imports don't help with industrial development. Countries rich in natural resources face a different set of problems, which is why I excluded them in the first post.

If you dont have an export industry pegging low is even more critical. It means you can develop one. It also means you can build up a foreign exchange reserve that will let you weather crises.

Most of the asian tigers + China did this and it was pretty successful in all cases - they followed a path from poor to rich.

Floating is fine if you're a big country who is substantially self reliant and with lots of exports but it's riskier if you're small fry at the mercy of international markets.

industrial development is a little bit harder than just setting an artificially low exchange rate. you need a well-trained workforce, access to input materials (if you have to import those at higher prices you have a bit of a hen-and-egg situation), infrastructure, logistics, a strong legal system, political stability,...

if you only lower your exchange rate without any of the other factors in place, my guess would be that you'd just end up being poorer. on the other hand, if you do have the other factors, Switzerland is a good example that a low exchange rate is not necessary to be an export powerhouse

It's definitely not a magic wand but it's a prerequisite for sure.

Switzerland has actually tried to pursue a policy of keeping its exchange rate depressed to make its industry and agricultural exports competitive.

High exchange rates dont preclude switzerland from exporting complex industrial machinery or watches or anything else high up on the value chain but you need to develop industrially before getting to the point where you can do that. El Salvador cant export fancy watches. 1990s China couldnt even dream of it either. China after decades of pegging low can do it.

45.89% down, that's insane

I always thought it wasn't such a bad idea, it's a country reliant on remittances, and wire transfers and alternatives are expensive (I used to work at Xoom/PayPal)

The other thing is that it never was well adopted by the public. I visited the country in January and some restaurants mentioned which items you could and couldn't buy using bitcoin on the menu

> country reliant on remittances

This is the big thing. #1 foreign income source is expat workers. Make it easier for people to send money home, send more people to USA, and its good for the economy that has no other resources.

Just say immigrant. No need to make sure people know you're talking about the white kind.

Immigrants stay in their new forever home. Expat workers have plans to return to their own home some day. They're not the same thing.

Also, even if they plan to stay forever, the people in question would be El Salvador’s emigrants, not immigrants.

I believe rr888 was making a point in the other way.. calling brown people like me expats :)

What? Your comment doesn't make any sense.

We are talking about El Salvadorian expats earning money in the US and sending it back to their families in El Salvador. Is El Salvador majority white somehow now?

And second, race is entirely irrelevant here. A person earning money temporarily in a guest country with full intent to go back to their home country is an expat. If they, instead, intend on staying in that new country permanently, then that person is an immigrant. White or not makes exactly zero difference here.

If it wasn't clear I meant El Salvadorians working in the USA and sending money back.

That's nothing in bitcoin world. It routinely gains more than few hundreds percent in 3 years. It is also know to drop below 20% of previous peak price.

It hasn't been around long enough to "routinely" do anything on a three-year period. There have been 4 such periods. That's not enough samples to say anything is routine.

How many would you want to see to call it routine?

I'm an `n=30` man, myself!

20-25, when kids born after Bitcoin emergence will start dying of old age.

For something with this effect size, I feel like people can start making a case in the mid-teens, but you're probably at 20+ before you can make a strong case.

Edit: That's cycles. So I'm saying it's 2055+ before any case can be made and it's 2070+ before a strong case can be made.

Actually, during the gold standard there were booms and busts every four years. Bitcoin might be on a different cycle but the constant inflation and deflation are actually expected with a fixed supply currency.

During the gold standard the boom/bust cycles were closer to a decade. Also, gold was a currency and Bitcoin is a speculative asset currently used for sending money to other countries and for illegal purposes.

I think it's important to notice that periodicity of bitcoin is not some emergent phenomenon happening for unknown reason. It's build into the bitcoin in form of reducing the rate of supply by half roughly every 4 years.

So do you really have to be hit in the head 20 times before you notice it spins?

So your claim is that a three year cycle is driven by a four year cycle?

Besides, the bust shouldn't be driven by the mining of new coins anymore. When a huge number we're being mined as a percentage of the total btc supply you could make that case. But now, the difference between generated btc now and after the halving is negligible.

But your overall point that causality linked to external factors is correct. It's just "the mechanism is halving the rewards" hasn't happened enough times to be valid because halving isn't reliable enough yet.

I didn't say it's on 3 year cycle. I said it can gain a lot in 3 years.

The cycle is 4 year, peak to peak.

Busts are not causing by mining more. Busts are caused by greed burning out. Greed that was caused by appreciacion due to more limited supply.

Reducing supply by half is never negligible because supply balances the demand so halving it leaves half of the demand unfulfilled.

Also half of the bitcoins are worth more than double that from before the halving.

and in 6 months when they are 50% up?

> in 6 months when they are 50% up?

Irrelevant. San Salvador has less than 3 months' imports in foreign reserves on hand (about 2 years' on a net basis [1][2]) and an $800mm bond payment due in January it can't afford. This is the stupidity of their Bitcoin play. They don't have the time horizon to handle something this volatile.

[1] https://data.worldbank.org/indicator/BN.CAB.XOKA.CD?location...

[2] https://data.worldbank.org/indicator/FI.RES.TOTL.CD?location...

lol

Where is the next batch of greater fools coming from?

capitulating deniers finally realizing they were wrong ;)

Only way I would ever invest in bitcoin is if I had a time machine

If it goes up 50% up in 6 months it will still be down 18.4% overall.

Stock market tanked 80% this year. It’s partially recovered. Being down 45% at this point isn’t even that bad, regardless of which asset you’re talking about.

BTC is/already has entered a macro bear market for the next 2-4 years. If El Salvador can stick it out, they’ll end up very well off during the next bull run.

> Stock market tanked 80% this year.

Which stock market is that? Certainly not US.

Which indices of the stock market showed an 80% loss from peak value?

Which stock market? The S&P 500 was down maybe like 23% from all time highs this year, and currently trending upwards

> I visited the country in January and some restaurants mentioned which items you could and couldn't buy using bitcoin on the menu

What exactly is the thinking there? Was it just a price limit or something more involved?

Next, do tech stocks. No matter your position, you have to be pretty bitter to actually develop and pay to host such a lame "told you!" site in a bear market.

"Oopsie woopsie! They're very down! Would you also like to irresponsibly gamble away your country's finances?"

It's 47 million in unrealized losses, even for a tiny nation absolute peanuts. It's a fraction of a fraction of the budget. Even the worst case is manageable, and there's a significant chance that it strongly bounces when the macro condition improves.

Should a nation put their entire treasury into BTC? Absolutely not, but diversification of assets is sane. Big lumps of low risk/low return, small lumps of high risk/high return potential. Business as usual.

> Next, do tech stocks

If the central bank of a cash-strapped nation started buying tech stocks with their foreign reserves, they’d rightfully be called out as loonies.

It’s why countries with surplus cash go through a lot of trouble to segregate their sovereign wealth funds from FX reserves. If the former goes down, it’s embarrassing. If the latter crashes, it’s existential.

"If the central bank of a cash-strapped nation started buying tech stocks with their foreign reserves, they’d rightfully be called out as loonies."

It's all optics. Because the above is exactly what happens, stocks got pumped 13 years in a row due to central bank policy. Do they own the stock? No, but they fully control the macro.

But anyway, my main point was to give a little pushback to the narrative, which seems driven by hate, a superficial "told ya", followed by dubious claims. It does not reek of a person that actually cares about any humanitarian issue at all.

You're comparing a reserve-currency central bank to one on the periphery. Thought about this for a while. That seems your singular mistake.

This recent episode of Crypto Critics' Corner podcast talks about the current situation in El Salvador and what difficulties the country is facing that led them to make this investment.

https://cryptocriticscorner.com/2022/03/29/episode-63-we-nee...

This won't age very well, just like all the other "bitcoin is dead" posts made during bear markets.

Also, El Salvador seems to be "up" if their whole economy is measured, and that's mostly because of their Bitcoin strategy. Especially, their tourism is up 81% compared to pre-pandemic levels. https://cointelegraph.com/news/tourists-flock-to-el-salvador...

How is their tourism related to their Bitcoin strategy.

I expect this site, and those like it, will age quite well.

Frankly, it doesn't matter if BTC is up in 10 years. Remember the saying: the market can remain irrational longer than you can remain solvent. Nation-states aren't immune to this phenomenon.

> How is their tourism related to their Bitcoin strategy.

Why are we talking about El Salvador right now? What's getting it in the news? What's getting people to read its Wikipedia page? What's reminding people it exists?

They could probably get in the news by lighting a pile of cash on fire too

As a Savadorean: It is not... the RECOVERY on tourism is most likely due the relaxation on rules regarding COVID-19, a negative COVID-19 test or even proof of vaccination is no longer required to enter the country. You no longer are required to use a mask to enter restaurants or pretty much any public place. That alone was enough motive to entice enough people (particularly Antivax Salvadoreans leaving abroad) to come visit and cause that rebound on pre-pandemic levels.

But that serves no good to the agenda of the pro-bitcoin, maxis and the goverment itself, so...

The article you link says there were 1.1M visitors so far. It also says "thousands of Bitcoiners have made the trip". I'm not really sure where you're getting the idea that tourists and the economy is up due to bitcoin, versus some other factors.

That article says:

> The report by the WTO states that some “Central American destinations have the best results compared to 2019,” including El Salvador at +81% compared with 2019, or pre-pandemic levels.

It's not clear in the source article where that figure comes from. When translated to English, the source article[1] says:

> In fact, several islands in the Caribbean, as well as Asia and the Pacific, along with some small European and Central American destinations have the best results compared to 2019: Seychelles (-27%), Bulgaria and Curaçao (both -20%), El Salvador (-19%), Serbia and Maldives (both -13%), Dominican Republic (-11%), Albania (-7% ) and Andorra (-3%). Bosnia and Herzegovina (+2%) even exceeded pre-pandemic levels.

Based on the quotation, it seems like that's the paragraph being referenced, but the figures don't match at all.

[1] https://www.unwto.org/es/news/turismo-inicia-2022-fuerte-per...

The +81% corresponds to the -19%. You just need to ignore the “+”. What they seem to be saying is that, while only at 81% of pre-pandemic levels, El Salvador is part of the group of countries having the best (least worst) deltas to 2019.

That would explain where the number comes from, but it's an incorrect and very misleading way of presenting the data, hence GP (reasonably but incorrectly) interpreting it as meaning that tourism is up from pre-pandemic levels.

You're right that this would be accurate if you ignore the "+", but they made the decision to include it, which gives the data a completely different meaning.

Of course; I was just helping the GP to understand what the article is trying to (mis)represent.

> but it's an incorrect and very misleading way of presenting the data.

As a Salvadorean I can tell you that is pretty much the way the goverment propaganda machine works... Misleading, inaccurate data or straight up lies. On this particular case the reality is that levels of tourism are back to 81% of its pre-pandemic levels, which is good on its own right, but wasn't good enough for the goverment agenda... so they starting pushing the "tourism is up 81%" thing and slapped bitcoin (which as little to nothing to do with that) on top. if you dig deep enough even the own goverment clarifies that they are talking about recovery and not growth on some publications underneath the propaganda [1]

[1] https://www.presidencia.gob.sv/el-salvador-es-el-segundo-pai...

> their tourism is up 81% compared to pre-pandemic levels

"Global international tourist arrivals more than doubled (+130%) in January 2022 compared to 2021," with "Europe (+199%) and the Americas (+97%)" posting the strongest results [1].

El Salvador's tourism numbers are weaker than its neighbors'. (Explosions of gang violence don't help [2].)

[1] https://www.unwto.org/news/tourism-enjoys-strong-start-to-20...

[2] https://www.nytimes.com/2022/03/27/world/americas/el-salvado...

They started a crackdown on those gangs after that event, and have arrested almost 50,000 gang members so far. https://en.wikipedia.org/wiki/2022_Salvadoran_gang_crackdown

If you believe Bukele's numbers, sure.

> that's mostly because of their Bitcoin strategy

You don't know that, do you?

If I had to guess, tourism would be up because COVID calmed down a bit so people are a bit more willing to travel now. I don't see the connection to BTC

Tourism to Costa Rica hasn’t seen the same recovery trajectory to El Salvador, even though Costa Rica historically has been much more popular than El Salvador.

IIRC, CR is still down 20% since COVID started and ES is up 20%.

How so? Either it'll say "NO!" or "YES!"

I guess it won't age well if what we call El Salvador today no longer exists.

As a Salvadorean I have to say the "El Salvador seems to be up" argument is bullshit, I suspect you are already aware given that your source for claiming "tourism is up 81%" is Cointelegraph... but just to clarify those numbers that the goverment and its propaganda machine made sure to spread:

1 - It is not growth it is RECOVERY, tourism is back to 81% of its pre-pandemic levels. Even the own goverment sources say that if you read the pages below the propaganda [1]. So no, tourism is not up compared to pre-pandemic levels, instead we recovered 8 out of every 10 visitors we had before the pandemic...

2 - No, it is not because of Bitcoin. I understand if you are pro-bitcoin, that's alright. But reality in here is that pretty much no business is accepting Bitcoin any more, even plenty of the business that did accepted it when the law passed have gone back to not taking it. The large lines you used to see on the Bitcoin ATMs are gone now that pretty much everyone that wanted to claim the $30 USD bonus have got it (and the overwhelming majority of them converted it to cash immediately... ) and the Bitcoin ATMs are as empty as a ghost town except for the occasional BTC enthusiast/speculator that uses it to cash out some money.

I live here... But if you believe I'm wrong or biased, I invite you to come here and check things for yourself, you may be up for a reality check regarding the goverment propaganda, but you will still have a good time doing tourism.

[1] https://www.presidencia.gob.sv/el-salvador-es-el-segundo-pai...

Yeah, it seems that the tourism number was mispresented.

Still, Bitcoin strategy put El Salvador on the global map, and I think it'll be positive for the country in the long run. In the history books, El Salvador will always be the first country to adopt bitcoin. I'm pro-bitcoin, but I'm pretty grounded on reality and I never expected it to transform the country overnight. It's a long game, which El Salvador is currently leading compared to other countries.

Economics is more complicated that a short term price move.

If there is sufficient unpayable dollar denominated debt, the central banks and governments will be forced to once again print trillions to re-inflate the debt bubble, incentivizing exponentially more bad debt. How do you suppose this process ends?

doesn't seem complicated to me when they bought bitcoin at ATH

the important fact about El Salvador is that it uses the US dollar and cannot print money.

I and other hypothesise that the Bitcoin thing was an attempt to handwave some fresh dollars into existence, as numbers in the Chivo app.

This didn't work because Chivo was incompetent rubbish.

Now compare the $47 million they are down in dollars to how much the Government in the United States wastes on absolutely useless stuff. Ridiculous to gloat about their decision to purchase Bitcoin and how it is bad. It is a long-term investment.

You could make this same site for people who invested in pretty much any tech stock over the same time period as most have declined by even more than 45%.

Fun little project. Author added 5 different wordings for current gains: 1.">= 10%" 2."> 0% AND < 10%" 3."0%" 4."< 0% AND -10%" 5."< -10%" Bitcoin is very volatile and will eventually go above 10% gains again. I wonder if the author will keep the website and keep paying for the domain if it stays above long term.

Perhaps they should've taken more IMF / World Bank loans instead to reduce the majority of their population to poverty and allow multinational corporations to steal their natural resources.

Keep me thinking about this quote: 'When the stock is up 30% in a month, don't feel 30% smarter', by Jeff Bezos

https://www.youtube.com/watch?v=V_OZKf_-w4s

There was an article a few days ago about avoiding "cute" error messages and I think this is a great example of a site that really needs to take that to heart. Loading this page without JS enabled results in "aghhhh i'm evalyooooooating" and similar messages that really show quite poorly.

It’s the “oopsie whoopsie” part of the message that reminded me of the same article.

Welcome to HN, where posts about bitcoin price are banned, unless it is down.

Could use some context on that page.

it seems like there is an "is xyz up" webpage, so someone jokingly created one for El Salvador , however meaning "up" as in their BTC holdings in US Dollar amounts

That’s the obvious part. But what the heck is El Salvador (the country)’s relation to Bitcoin?

https://www.bbc.com/news/world-latin-america-57398274

> El Salvador became the first country in the world to use Bitcoin as legal tender, after having been adopted as such by the Legislative Assembly of El Salvador in 2021.

https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

In 2021 they adopted it as legal tender [1]. Finance observers such as patio11 have commented "Tether's interactions with El Salvador might be the boldest Bond villain plot ever executed in real life. [..] They're using a sovereign nation as the cash-based business to intermix their dirty funds flows in, and daring the feds to see what happens if they cut them off." [2]

[1] https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

[2] https://twitter.com/patio11/status/1493033725524799489

El Salvador very publicly invested in bitcoin for the country's future. It didn't go well.

Seems the president, Nayib Bukele, is into Bitcoin: https://www.nytimes.com/2022/07/05/world/americas/el-salvado...

Also, the first linked source on each "buy" on the IsElSalvadorUp page is a tweet from the president announcing that they've bought more BTC.

The head of state declared BTC legal tender last year (ES' official currency is the USD). ES has been accumulating BTC since then, even as the price continues to drop.

Questions like this can be answered by searching "El Salvador bitcoin".

No need. I got five informative answers before your snarky one. But thanks for the advice anyway!

El Salvador is trying to use Bitcoin as official currency and legal tender. They bought a ton of it before the crash. It's a dumpster fire the size of a national economy.

About the same rate as Argentine peso (blue) over the last 11 months. Considerably better than Turkish lira.

recalling from early 2021 readings... as I understood it they took on BTC to help break the backs of the FX / Money Transfer racket. A lot of their cashflow comes from foreign workers sending money back to their families. [1]

[1]: here's a hit from google https://www.reuters.com/business/finance/remittance-costs-ke...

In times of huge global economic downturn, El Salvador's economy is growing, crime is down, tourism is booming, president has the highest approval rating in the whole world, country attracts investments thanks to Bitcoin, citizens save on remittances and can safely store savings in something that isn't that easy to steal as cash and yet all that Bitcoin-haters can think about is the dip in Bitcoin's price (caused by all the shitcoin scammers).

Fiaters have a time horizon of a gold fish.

> president has the highest approval rating in the whole world

Not true. Putin has 146% approval rating.

At what level of HN Karma are you able to delete someone else’s post?

I really dont get why the majority of HN is so harsh on bitcoin

Just bet against HN. I remember people here hated Dropbox. I've realized bet on everything against people here because they suck at making money. Basically inverse HN and you will be rich. I tried it with Tesla but a bit late.

This place has a hive mind and that's the best part.

So crypto and cbdc coins

Someone's gotta hold the bag. Might as well be the El Salvador government.

"it's loading dude calm down" on refresh made me laugh

DCA

Poor financial decisions aside, I have to say I absolutely love simple, minimal pages like these. It only needs a (+-)% for each buy and it's perfect.

A fair analysis of El Salvador's bitcoin experiment would have to include the foreign investment and international travel that it stimulated.

Which so far is close to ZERO... I live here and I can tell you that so far no big business has opened operations in here "thanks to bitcoin". Our beauty pageant contestant turned US ambassador Milena Mayorga has organized several excursions to the country for "bitcoin investors" including some Thether funders and her now best buddies/cheerleaders Max Keiser & Stacy Herbert. I still have to see the payoff of those excursions aside from free helicopter rides for the assistants [1] ...

[1] https://www.elsalvador.com/noticias/negocios/bitcoin-criptom...

It's only up or down if they are planning on exchanging it for USD, instead of using it as a currency.

No one is using Bitcoin as a currency.

Some folks are using it to buy stuff, does that not count?

This link says that it's considered "legal tender" in El Salvador: https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

Not if they're not buying/selling things from/to outside the country in BTC.

Why does that not count? I could use bottle caps as currency with my neighbors if we all agreed to it.

Things are still priced in dollars though with btc acting as the medium of exchange.

You see a pupusa for $2. You type $2 into your wallet which converts it to btc based on the current exchange rate. The recipient receives that btc and ideally converts it back to USD immediately. Both ends of the transaction are valuing things in dollars but uses btc (perhaps over Lightning network) to transfer the value. In this scenario, there is little to no exposure to the volatility of the price of btc.

Western Union is the only option for so many people around the world still. There definitely seems to be a need to disrupt cross border remittances.

exactly, that's what lightning network is for.

Careful when you say absolute things like "No one"

https://www.bitcoinbeach.com/

Delusional

Great. Finally we found a proper crypto use-case.

Decentralized “Steal from the poor and give to the rich.”

You'd think there'd be a lot of pushback from incumbents in that space.

Referral links to FTX and Binance are present on the webpage.

Takes a special kind of person to try and capitalize on the schadenfreude of _other people_ with respect to the results of an entire nation's landmark financial decision (whether the results be good, bad, or indifferent).

seems like you've never met a crypto evangelist.

pretty sure they're in it for the tech </sarcasm>

This looks bad, but I assume that with time the price will recover. I mean, bitcoin will eventually reach the point where it doesn't recover ever again, but that point hasn't necessarily been reached yet.

>This looks bad, but I assume that with time the price will recover.

This is a fallacy that leads to holding poor investments. There's an opportunity cost to every dollar invested beyond the drop in price.

You are also running with an assumption that whatever investment they may have used the same funds for, would have netted a gain (or a lower loss). The opportunity cost argument is only valid if in the alternative investment you actually end up in a better spot, that's not a given.

Yeah, especially given that the risk-free rate is currently pretty strongly negative in real terms.

Buying the dip works every time, until it doesn’t.

Can you explain the thought process behind that assumption?

It's a consequence of the Law of Averages. Sometimes things go up, sometimes things go down, but for some reason all things will return to some historical mean often referred to as "reasonable" or "normal."

Historically bitcoin has gone up and down in cycles. There is no reason to think it won't come up again. But I may be wrong as I know very little about crypto.

They just need to keep buying the dip

Yes, and soon a hedge fund can go and acquire the full country at bargain basement rates!

Most definitely. Bitcoin has never gone up 10-20x in a short timespan before. It will never happen!

https://www.youtube.com/watch?v=XbZ8zDpX2Mg

Also GameStop.

Not to mention the lottery. A lottery ticket can go from $1 to several millions in a split second.

I love how that video is from 2015 when the price was $200. Two major bubble expansions later, and literally 100x higher BTC price, and people are still saying the same dumb thing.

I would never suggest that anyone gamble on cryptocurrency that they can't afford to lose, but all of these El Salvador buys are less than a year old. People in this thread are ridiculing buys that wouldn't even qualify for long term capital gains. This is the kind of short-term short-sighted thinking that causes people to make terrible financial decisions, like panic selling.

Warren Buffet has the famous saying "The stock market is a device for transferring money from the impatient to the patient." If you can't think in terms of 10 year horizons for your investments, you probably shouldn't be doing it.

Yes.

I'm no fan of BTC, but this is BS.

The last dip lasted 2 years, if you bought at the wrong time.

In 2-5 years we can talk, lol

> if you bought at the wrong time.

That's the problem; no one can predict when the right and wrong times are.

Buying at all time highs after a parabolic move upwards is the wrong time to buy and hold, not because a loss is certain, but because it is probable.

For sure, going all in on anything when the price is within 5-10% of the all time high is just crazy. Maybe doing regular small buys to Dollar-Cost-Average your way in isn't so bad. Better than not holding anything of something you like, but the closer to ATH the buy is, the riskier it is.

And that hedgefund is called, the International Monetary Fund (https://en.wikipedia.org/wiki/International_Monetary_Fund).

If they buy the dip enough times, eventually they'll hold a monopoly on the world's supply of dip. All the other countries will come begging as their dip reserves run dry and the prices of their goods, unable to decrease, succumb to hyperinflation. We'll see who's laughing then!

I tried this once when I was little, but dip tends to go bad pretty quickly so you need even more dip to cover up the older dip and soon you've spent all your money on dip but no one wants your old dip

You just weren't repackaging your old dip in enough layers of sufficiently abstruse financial instruments to convince people that they did want it. It's all about marketing.

"The market can remain irrational longer than you can remain solvent."

Probably applies. Except that "rationality" is not a part of the BTC market....

This is good for dipcoin.

Sour cream and onion, thanks!

No they need to buy BBBY.

I wonder what went through their heads when they chose BTC over a lot of other cryptos. ETH, BTC, LTC, and others from early crypto days might have baggage but I believe there's a healthy amount of cryptos that are stable-ish (more stable than some national currencies) and could be good store of value.

This might be analogous to the adoption of socialism by countries as well, well-intended but horribly executed.

A stronger currency isn't necessarily a good thing.

One or both of (a) sovereign control over monetary supply (b) a stable currency are, though?

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