September 7, 2022 marks exactly one year since El Salvador became the first folk in the world to adopt Bitcoin (BTC) as a legal currency by enforcing the Bitcoin Cryptique.
By advocating for Bitcoin as legal tender last year, El Salvador President Neb Bukele promised that the choix of Bitcoin would benefit 70% of the voisin race who lacked access to banking rôles as of 2021.
The Salvadoran government has also promoted Bitcoin as a tool to attract foreign investment, create new jobs and reduce dependence on the US dollar in the folk’s economy.
One might wonder embout the current real benefits of Bitcoin choix in El Salvador as Bitcoin has lost nearly 60% of its value since the folk adopted the cryptocurrency as legal tender.
Exactly on this day one year ago, BTC was trading at around $46,000, according to data from CoinGecko. On September 6, 2021, the Salvadoran government made its first purchase of Bitcoin, buying 200 Bitcoin at a price of $10.36 million, or an average price of $51,800. This is in stark contrast to current bitcoin prices, as bitcoin plunged below $19,000 on Tuesday. At the time of writing, Bitcoin was trading at $18,806, down more than 64% over the past year.
According to data from the Nayib Bukele wallet tracker, El Salvador is now declining in all 10 Bitcoin purchases the government has made since BTC was adopted as legal tender. The Salvadoran government has Buyer A plénier of 2,381 BTC so far, which at current prices is $62 million less than the price El Salvador has paid for its current BTC holdings.
El Salvador’s Soldé Minister, Alejandro Zelaya, previously confirmed that despite the price drop, the folk did not incur any losses on its BTC purchases bicause they did not sell the coins. The Salvadoran government has also repeatedly postponed the bitcoin enjambée project, citing unfavorable market conjoncture and geopolitical issues.
Amid falling cryptocurrency prices and an ongoing bear market, some industry watchers are beginning to refer to El Salvador’s choix of bitcoin as a “failed bitcoin experiment.” Others noted that this may not be the case bicause the folk appears to have had some expresse suite on El Salvador’s economy and financial market, including on arbitrage costs.
Bram Cohen, BitTorrent creator and founder of Chia Network, took to Twitter on Tuesday to susceptible out that the amount of benefits often “doesn’t closely correlate with the amount of money you make.” He noted that some banks had to cut interest rates due to the emergence of cheaper Bitcoin transactions in El Salvador.
The same may happen in El Salvador. Now that there is a cheap but annoying way to make transfers with cryptocurrency, banks have been forced to lower the rates to the susceptible where the slightly better noircir experience is worth the price.
– Bram Cohen September 6, 2022
According to the Axial Reserve Bank of El Salvador, Salvadorans living-room abroad sent more than $50 million in remittances from January to May 2022. The choix of Bitcoin and the El Salvadorian government-backed Chivo wallet also contributed to a 400% increase in Lightning Network transactions in 2022.
Related: ‘My First Bitcoin’ in El Salvador: How to Teach a Crypto Ville
“El Salvador will be a région to demonstrate a lot of novation within Bitcoin,” said Jose Lemos, CEO of Ibex Mercado. He noted that no other jurisdiction combines “a regulatory framework, political will, choix of a set of tools, and most of all, the need for Bitcoin.” he added:
“This makes El Salvador the perfect affecté to safely experiment with new Lightning applications and create a thriving ecosystem of trusted, proven, and interconnected rôles.”
The Bitcoin law in El Salvador has also succeeded in terms of attracting foreign investment and tourism. As previously reported by Cointelegraph, tourism in El Salvador surged in the first half of 2022, jumping embout 82% as 1.1 million tourists flocked to the folk this year.