Is El Salvador in debt because of the bitcoin price drop?

coupable

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Quote from: Henrobakkara on February 16, 2022, 08:49:16 AM

Quote from: coupable on January 28, 2022, 05:28:53 PM

Quote from: yazher on January 25, 2022, 11:25:37 PM

Quote from: asus09 on January 24, 2022, 10:46:40 AM

the media circulating, the impact of the decline in el salvador debt bonds swelled to become one of the worst performers, but strangely when crypto was destroyed, el salvador actually bought bitcoin, president tayib bukele dared to buy bitcoin, maybe tayib bukele believed that one day bitcoin would high again, and will make their economy better again.

All eyes are on them, especially those countries that are planning to do what they have done regarding bitcoins. In my opinion, they are doing exactly right buying in the dip and continue holding it until the price will recover again. since their debt has increased this year compared to last, I'm sure they considering other opportunities and ways to counter that problem and bitcoins will become one of their main solutions.

Only El Salvador citizens who invested in bitcoin following the adoption will suffer from debt because of the bitcoin price drop. Likely most of them don't know about how things work in the bitcoin system.
What i liked the most with El Salvador is that it adopted bitcoin over other altcoins like stable coins. It's a real investment for the future.
However, the country has to continue developping a whole infrastructure for a popular adotion. It's not an easy step imo for a third world country like El Salvador .

The same reason you like their decision is the same reason the El Salvadorian government chose Bitcoin over stable coins because they are stable. They needed something that will at least propel the country forward in terms of financial gains which is to be the outcome of an investment. the country has been in that financial problem and adopting stable coins wouldn't have made any impact except for Bitcoin Investment which will definitely make an impact on the economy if they keep on other infrastructural development around it.

I don't agree with you in the point tht they chose bitcoin over stable coins as offcial currency but also as a official way of payment.

Obito

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Quote from: willoweb on February 16, 2022, 10:47:15 AM

It seems I have already spoken in this forum thread - but I will gladly repeat my theses. El Salvador has carried out and continues to carry out a reform in the financial sector that has no analogues in world history. Such an important and bold step is being taken with an eye to the long term. It is not a question of one or two years - it is worth evaluating such efforts after 5-10 years. The population must get used to it, and an appropriate infrastructure must be formed. I am sure that El Salvador and its people will ultimately benefit from this reform.

The problem with these is that the masses are going to have a hard time readjusting, remember that it's taking years before taking off so it's definitely going to be causing problems in short-term and that's what most people in a country can't handle, a period of inconvenience. I think that there's more to the debt of El Salvador than just bitcoin because I am sure a country needs money in order to grow in different aspects.

dbc23

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Quote from: Imran232 on January 24, 2022, 04:39:05 AM

We know that El Salvador was the first country to make bitcoin legal tender in their country. And he's doing all of this while the price of bitcoin is rising. And they continue to notify us about their new investment in bitcoin. How much bitcoin did they buy, and when did they buy it? How much did they spend on the average price of a bitcoin? Because of the recent massive drop in bitcoin, I assumed that this bitcoin drop had put them in debt. If this dump continues for some more weeks, then it might be problematic for the El Salvador government. Because the opposition party has something to blame them for any kind of debt. And because of the economy, stocks and fiat investors also have something to say against Bitocin. If this happens, then other countries will be really confused about making bitcoin legal tender. To make it legal tender, they might study the case of El Salvador.

It's just my speculation. What do you think about my speculation? I really appreciate your opinion.

They will run into debts because the bought bitcoin at a high price and will have to wait till the market regains another bull run to return to profit. don't be surprise this is not stopping El Salvador from taking advantage of the bear market to buy more. El Salvador has been sanctioned by IMF in recent times about their Bitcoin investment and also made threats of restricting El Salvador from future loans if they continue with Bitcoin but I just see the commitment in the adoption of Bitcoin by El Salvador despite the state of the market

willoweb

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It seems I have already spoken in this forum thread - but I will gladly repeat my theses. El Salvador has carried out and continues to carry out a reform in the financial sector that has no analogues in world history. Such an important and bold step is being taken with an eye to the long term. It is not a question of one or two years - it is worth evaluating such efforts after 5-10 years. The population must get used to it, and an appropriate infrastructure must be formed. I am sure that El Salvador and its people will ultimately benefit from this reform.

KennyR

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Quote from: Slow death on February 16, 2022, 08:57:37 AM

Quote from: Oneandpure on January 31, 2022, 08:24:04 AM

Nayib Bukele El Savador president is most wonderful think for the future how he try to adopt bitcoin and altcoin as legal transaction payment, right now he always give and take several assets from his country to buy back bitcoin as investment assets on the future. I think most wonderful investment beside looking for with many real project and not really hard looking for investor come to his country make an investment. With bitcoin holding he can earn profit when bitcoin price pump and actually he always active buy back bitcoin when have lower price.

talking about this subject I still forget to ask:

Can anyone tell me how many exchanges moved to El Salvador after the president of El Salvador passed these laws that benefit bitcoin?

how many bitcoin related casinos have el salvador license?

it would be great if we have this data

There is no clear data on this subject about exchanges and Casinos that moved to El Salvador. El Salvador have planned for bitcoin city. Maybe after the completion of the Bitcoin City project we can expect more exchanges and casinos move their base. Also El Salvador have announced more subsidiary and ease of business which will surely attract more new businesses into the country.

Slow death

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Quote from: Oneandpure on January 31, 2022, 08:24:04 AM

Nayib Bukele El Savador president is most wonderful think for the future how he try to adopt bitcoin and altcoin as legal transaction payment, right now he always give and take several assets from his country to buy back bitcoin as investment assets on the future. I think most wonderful investment beside looking for with many real project and not really hard looking for investor come to his country make an investment. With bitcoin holding he can earn profit when bitcoin price pump and actually he always active buy back bitcoin when have lower price.

talking about this subject I still forget to ask:

Can anyone tell me how many exchanges moved to El Salvador after the president of El Salvador passed these laws that benefit bitcoin?

how many bitcoin related casinos have el salvador license?

it would be great if we have this data

Henrobakkara

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Quote from: coupable on January 28, 2022, 05:28:53 PM

Quote from: yazher on January 25, 2022, 11:25:37 PM

Quote from: asus09 on January 24, 2022, 10:46:40 AM

the media circulating, the impact of the decline in el salvador debt bonds swelled to become one of the worst performers, but strangely when crypto was destroyed, el salvador actually bought bitcoin, president tayib bukele dared to buy bitcoin, maybe tayib bukele believed that one day bitcoin would high again, and will make their economy better again.

All eyes are on them, especially those countries that are planning to do what they have done regarding bitcoins. In my opinion, they are doing exactly right buying in the dip and continue holding it until the price will recover again. since their debt has increased this year compared to last, I'm sure they considering other opportunities and ways to counter that problem and bitcoins will become one of their main solutions.

Only El Salvador citizens who invested in bitcoin following the adoption will suffer from debt because of the bitcoin price drop. Likely most of them don't know about how things work in the bitcoin system.
What i liked the most with El Salvador is that it adopted bitcoin over other altcoins like stable coins. It's a real investment for the future.
However, the country has to continue developping a whole infrastructure for a popular adotion. It's not an easy step imo for a third world country like El Salvador .

The same reason you like their decision is the same reason the El Salvadorian government chose Bitcoin over stable coins because they are stable. They needed something that will at least propel the country forward in terms of financial gains which is to be the outcome of an investment. the country has been in that financial problem and adopting stable coins wouldn't have made any impact except for Bitcoin Investment which will definitely make an impact on the economy if they keep on other infrastructural development around it.

TribalBob

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I think there is no debt, where I believe they have taken profit at yesterday's highest price, besides the value of the bitcoin they have has not decreased, only the value in fiat has decreased.

Gamerholic

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So the rate has changed over the past 5-7 days has grown quite a lot. Thus, it can be stated that El Salvador has either already left its unprofitable status or has already entered the green zone of profitability. This was obvious to everyone who has been following bitcoin and the market for more than a year (like me). So I think by the end of the year, colleagues of the President of El Salvador from Latin America and other regions of the world will think about how to partially or completely adopt his experience. It is especially sweet to see how the World Monetary Fund is indignant about this. So - the guys there are doing everything very well!

e_abrams

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The price is once again pumping, so even if they had problems because of the sudden depreciation, they may ease or disappear soon enough. I agree, Bukele does not strike me as dumb either - he had them buy even more Bitcoin when the price dropped and once it rallies again they will be in an even better position than before.

Slow death

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I think the point of it all boils down to this:

- did the president of el salvador take government money to buy bitcoin? if yes, did he ask for authorization from parliament or does the law allow him to buy bitcoin without having to ask for authorization from parliament?

- the president of EL salvador bought bitcoin when the price was cheap, with some exceptions where he bought it at a high price but overall he is said to have made a good choice, but it will also depend on whether he has not used the money the government will need so soon

Gamerholic

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I would not speak so categorically about "debts" because after the purchase there was no sale and in fact this country did not record its "loss". Therefore, I think we will just wait for the moment this year when bitcoin is once again about growth and can update its historical maximum - then articles and opinions about this will change exactly 180 degrees. Everyone will say how far-sighted and smart this politician is who went on such a bold experiment, even despite the shouts from the International Monetary Fund! (For which he - special respect!)

goldkingcoiner

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There are a few things that need to be considered. First of all, unless these Bitcoins were bought with fiat that was considered debt, then yes, that debt hole has now grown. If not, then its just an investment that has absolutely no conditions upon it as to needing to be paid back.

Furthermore, we are ignoring the mining activities which may even out the loss from the dip.

And finally, when it comes to businesses, I think the loss can be written off as business expenses (Although I am not sure on this one). So everything evens out at the end.

Gasty4

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I don't think they're in debt over the decrease in price if Bitcoin drop.
My main fear is not wanting to see investors or those that have bought Bitcoin panic sell.
Since they're not long term holders of bitcoin, they might not be able to hold down for longer time.
Advice:While educating and advocating about Bitcoin do well to tell them about demerits if it, this will see them brace up when a situation like this turns up.

Oneandpure

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Nayib Bukele El Savador president is most wonderful think for the future how he try to adopt bitcoin and altcoin as legal transaction payment, right now he always give and take several assets from his country to buy back bitcoin as investment assets on the future. I think most wonderful investment beside looking for with many real project and not really hard looking for investor come to his country make an investment. With bitcoin holding he can earn profit when bitcoin price pump and actually he always active buy back bitcoin when have lower price.

Baofeng

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Quote from: pinggoki on January 31, 2022, 02:38:48 AM

I don't think so, it's a country and 400 bitcoin in my opinion isn't a lot of money that it can make a dent in their treasury to the point that they're going to resort to having debt or borrowing money to supplement what was left by buying those bitcoins, I mean bitcoin is probably just a small aspect of the money that El Salvador is being spent into so there's probably other things that have made their debt bigger but that doesn't mean that those bitcoin didn't play any role.

At the current price, it's more or less $15 million, so yes it's not a lot of money. If they invested like billions so that could be questionable and maybe they could really be affected by the price drop. We all know that it is a huge gamble for El Salvador's president, but it's a calculated risk. The rewards might not be seen today, but it could be the returns in the next bull run could be huge dividends and that is the time that we can say that his experiment has succeeded.

stadus

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Quote from: pinggoki on January 31, 2022, 02:38:48 AM

I don't think so, it's a country and 400 bitcoin in my opinion isn't a lot of money that it can make a dent in their treasury to the point that they're going to resort to having debt or borrowing money to supplement what was left by buying those bitcoins, I mean bitcoin is probably just a small aspect of the money that El Salvador is being spent into so there's probably other things that have made their debt bigger but that doesn't mean that those bitcoin didn't play any role.

Well, El Salvador was already in debt before they start adopting bitcoin. In fact, Bukele plans to add 410 more bitcoin which costs around $15 million while bitcoin is cheaper because he really believes that bitcoin could make them a fortune in the long run. However, there's still no proof that El Salvador is losing right now because as far as i know, they are buying bitcoin for long term hodling, so most likely Bukele is not that fool enough to sell bitcoin while there is dips.

pinggoki

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I don't think so, it's a country and 400 bitcoin in my opinion isn't a lot of money that it can make a dent in their treasury to the point that they're going to resort to having debt or borrowing money to supplement what was left by buying those bitcoins, I mean bitcoin is probably just a small aspect of the money that El Salvador is being spent into so there's probably other things that have made their debt bigger but that doesn't mean that those bitcoin didn't play any role.

coupable

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Quote from: yazher on January 25, 2022, 11:25:37 PM

Quote from: asus09 on January 24, 2022, 10:46:40 AM

the media circulating, the impact of the decline in el salvador debt bonds swelled to become one of the worst performers, but strangely when crypto was destroyed, el salvador actually bought bitcoin, president tayib bukele dared to buy bitcoin, maybe tayib bukele believed that one day bitcoin would high again, and will make their economy better again.

All eyes are on them, especially those countries that are planning to do what they have done regarding bitcoins. In my opinion, they are doing exactly right buying in the dip and continue holding it until the price will recover again. since their debt has increased this year compared to last, I'm sure they considering other opportunities and ways to counter that problem and bitcoins will become one of their main solutions.

Only El Salvador citizens who invested in bitcoin following the adoption will suffer from debt because of the bitcoin price drop. Likely most of them don't know about how things work in the bitcoin system.
What i liked the most with El Salvador is that it adopted bitcoin over other altcoins like stable coins. It's a real investment for the future.
However, the country has to continue developping a whole infrastructure for a popular adotion. It's not an easy step imo for a third world country like El Salvador .

Sanitough

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Quote from: TheNineClub on January 28, 2022, 08:03:26 AM

El Salvador's debt has been steadily going up for a number of years. This is the issue with the crypto bubble, a bunch of people thinks that BTC (or crypto in general) is the only factor in saving or killing an economy, and that's just not how the economy works. It's never a single thing, and things such as BTC accumulation will not affect the overall debt projected in the oncoming years. And when BTC goes back up, you will see that El Salvador's debt will not change that much either. SO the short answer is NO, it's in debt because it has had economic turmoil for a number of years prior.

El Salvador has been in debt crisis already even before which made them to switch into bitcoin hoping that it could be the answer from their poor economic condition. And that's when they start buying 410 bitcoins at a higher price. Maybe this is the reason why most of the critics think that El Salvador is definitely in high debts right now since the price of bitcoin falls. But no, because they are not selling their coins at a lower value. They even buy more of it as their main plan is to hold bitcoin for long term so they can gain extreme profits from it in the future.

Topic: Is El Salvador in debt because of the bitcoin price drop? (Read 673 times)