Is El Salvador’s President’s Decision to Buy One Bitcoin Per Day a Good Idea?

Without a doubt, one of the biggest lovers of Bitcoin (BTC) is Nayib Bukele, President of El Salvador. In 2021, the politician received approval to make the primary cryptocurrency a local currency alongside the US dollar.

Since then, he has been a staunch supporter of Bitcoin, despite the adverse events that contributed to BTC’s decline. A notable example of this is that Bukele announced today on his Twitter profile that starting November 18, 2022, El Salvador will buy one Bitcoin a day.

El Salvador’s history with Bitcoin

On September 7, 2021, Bitcoin became legal in El Salvador. However, this was not a decision supported by the entire population. Many protests against the mandatory use of BTC in businesses have arisen.

Even the International Monetary Fund demanded that the Central American country stop using cryptocurrency as official money.

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However, none of this was an obstacle for the president of El Salvador to stop supporting BTC. A study for using volcanoes to mine Bitcoin was even conducted, a city dedicated to crypto is created and the country continues to buy the cryptocurrency.

The upheaval surrounding Bukele’s decision became even greater as the cryptocurrency market began to undergo an intense correction, which saw BTC fall from $52,700 in September 2021 to the current $16,581.

According to economist Ricardo Castaneda, El Salvador’s estimated loss is around 70 million dollars.

However, this crash does not seem to bother Bukele, who in June of this year stated that the country’s government had purchased 80 Bitcoins at $19,000 each and now intends to continue at this pace of accumulation at one Bitcoin a day.

But is this a good decision?

How Bitcoin was introduced to the nation has already been questioned. After all, BTC is not designed to be mandatory, but used by anyone who chooses to.

Even Vitalik Buterin, the creator of Ethereum (ETH), stated that it was not a good decision for Bukele to establish mandatory use of the cryptocurrency.

Without the population having a real understanding of the blockchain world, they end up believing that the country is losing money on this movement and do not have a long-term vision, as they do not understand the real value of Bitcoin.

A good example of this was seen in a survey in June this year. 71 percent of the 1,270 Salvadorans interviewed said the Bitcoin law did not give them any financial benefit.

The survey, conducted by the Instituto de Opinion Publico at the Universidad Centroamericana “José Simeón Cañas,” reported that 12.8% of Salvadorans said the law had little economic benefit for their families.

Therefore, it is clear that the population cannot understand the proposed value of the cryptocurrency: money without government intervention. On the contrary, they are forced by the state to use BTC.

In this sense, with the cryptocurrency market increasingly tense and more companies affected by the FTX collapse, more declines can be expected for Bitcoin, and Bukele’s decision to continue buying the cryptocurrency could inspire even more negativity from the population towards BTC.