El Salvador: Thousands Of People Move to “Buy $30 Of Bitcoin” – But This Could Backfire

1235
El Salvador: Millions Of People Move to
Advertisement
   

Jason Deane, a consultant for cryptocurrency exchange Luno and a Bitcoin miner, has raised concerns over plans permeating various social media platforms to buy $30 of Bitcoin to commemorate El Salvador’s Bitcoin law implementation.

The “buy $30 Bitcoin” movement that first appeared on a Brazilian Reddit group has gained traction on Twitter too. Millions of people have indicated an interest in joining the campaign to pump the price of Bitcoin to mark the 7th of September.

The amount is a nod to El Salvador’s plan to give away $30 worth of Bitcoin to every citizen that downloads and signs up for the country’s official Bitcoin wallet, Chivo, when the law is implemented today. This is in order to promote adoption by the citizens.

Deane is however worried that while the sentiment to support the country’s move is noble, it may have unintentional negative effects on the country. He mentions several reasons for his fears. For a start, the planned pump of Bitcoin will result in El Salvadorans receiving fewer Bitcoins for $30.

Additionally, with the volatility of Bitcoin, if the pump reverses, the citizens who try to convert their Bitcoins to dollars may be faced with a short-term devaluation. This he thinks will result in slowing the adoption of the cryptocurrency in the country as it may convince those still on the fence to stay away.

Advertisement
   

Based on this, he recommends that instead of buying, what would benefit the country’s citizens would be if there is a mass sell-off that would drop the price of Bitcoin. Alternatively, the buying plans can also have a positive effect if carried out at a later time from tomorrow, preferably a month from tomorrow. His third recommendation, which he highlights as his preferred one, is for the market to do nothing and allow Bitcoin to continue its trend naturally while supporting the citizens of the country with education. 

Meanwhile, in the Central American country, things are in place for the law to become effective today. However, some factions of the country have recently opposed the law. Last week, there were protests against the planned adoption of Bitcoin as legal tender. The protesters, which included workers, veterans, and pensioners, said their fears were that Bitcoin’s volatility could affect their purchasing power. 

Despite this and several other criticisms, the country’s government is advancing with the planned implementation and has put in place the needed infrastructure to facilitate adoption. The country has been installing Bitcoin ATMs to allow citizens to convert the token into fiat money and last week, El Salvador’s Legislative Assembly passed legislation to allow for the creation of a $150 million dollar Bitcoin Trust to back conversions of Bitcoin to U.S. dollars  

President Nayib Bukele has attributed the protests to being spearheaded by his opposition. The president is confident that the benefits the adoption of Bitcoin as legal tender will bring to the country will quell all opposition. 

Significantly, the anticipation of the date has been acting as a market-moving event as Bitcoin has been pumping. Amidst the broader cryptocurrency market rally, Bitcoin has been on a strong run of late, surging to almost $52,000 on Monday to touch the highest level since May.