It’s smart for El Salvador to hold bitcoin. It scares the IMF into handing them concessions and it acts as a great store of value in the meantime.
1. It promotes El Salvador innovation and is free publicity.
2. Documented that between when El Salvador bought bitcoin and today bitcoin appreciated more than the dollar.
3. El Salvador had to replace its currency less than 25 years ago because it collapsed.
4. The IMF is clearly including bitcoin into its talks with El Salvador https://www.reuters.com/technology/imf-says-bitcoin-remains-...
It has nearly doubled in the past year. Which is great if you're holding it as a speculative asset. Not great if you simply want a stable price "store of value"
Edit: Feel free to downvote or disagree, although if so I'm curious what your definition of "store of value" is and how price volatility factors in if at all.
I put "volatile" between quotes because it's only ever volatile one way: inflating into irrelevancy.
To me it's simple and all that is needed to go is to look at the message Satoshi put in the genesis Bitcoin block:
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
It's a giant middle finger to governments that do always manage, one way or another, to ever print more money and to grow their public debt ever bigger.
That Bitcoin managed to get in this month of October both the FED and the ECB to synchronize publications saying it's time to think about banning Bitcoin shows Satoshi's middle finger worked.
This is still better than a currency which is deflationary by nature, which BTC is.
Deflationary currency doesn't get spent. What fool would hand his Bitcoin over for some bread now, when he could buy twenty loaves of bread if he just waits until the last BTC is mined?
But from a consumer's perspective, deflation is a feature. I don't want to spend my money! I want to save it, and to be rewarded for saving it, so that by consuming less I can also work less.
Why would I hand over my Bitcoin for some bread? Because I'm hungry and need to eat. Otherwise yes, I'll save my money for later, no need for needless and wasteful spending.
If I have to hand over more and more value over time for the same amount of bread (that is easier and easier to manufacture each decade), then "the economy" isn't doing well.
If I hold the scarcest money in the universe, then the bread will get get cheaper and cheaper to me over time. This is a great economy.
I'm not going be sitting around in my riches starving because food will be cheaper next week :-D :-D