El Salvador already adopted cryptocurrency as an official currency in the last eight months. Now the lingering part of this still falls back to the market dip going on presently in cryptocurrency. As the market is falling now, does that mean El Salvador will fall too?
The failure of Salvador has nothing to do with bitcoin, but it has a lot to do with Bukele who some have started worshiping here as Jesus, he is a populist who stretched the budget to the maximum to try and basically bribe everyone, from the gangs that were getting paid to stop committing murders to create thousands of jobs for the government to hire everyone, even the 30$ airdrop was just another of his let's rain money one everyone so they call me the best president.
Salvador was in debt, Bukele went one step further and increase government spending as much as he could, the deficit went from 3% to 8.19% and then up again to 9.20, while every other country was seeing the deficit going down after covid, no he pushes more spending. On top of that, the actual government budget is also way lower percentage-wise around 30% compared to Denmark for example at 53%.
For example, let's say that happens with a GDP of 100.
You have a budget of 30% to GDP, with a deficit of 9.2, it means you're spending 30% more than you have.
You have a budget of 53% to GDP, with a deficit of 9.2, it means you're spending 17% more than you have.
Basically, if Salvador does the same thing in 2023 it will mean he has burned in deficit in three years one year of budget in advance.
The investment in Bitcoin re a drop in the ocean, and even if it reaches 300k it won't be to save the messed-up finances, it needs around 600k/coin.
Many debates have erupted online regarding whether or not this is a bitcoin event. However, it was clarified that the event was a financial inclusion event that would aid in the prioritization of funding available to small businesses.
And of course, we haven't heard anything about it once it finished since it was just one of the propaganda moves done by Bukele, all glitter no substance.