September 24, 2023

Because of its finite supply of just 21M digital coins, Salvadoran President Nayib Bukele projected that BTC would eventually witness a massive price spike.

El Salvador’s President New Prediction for BTC

Shortly after the IMF encouraged his government to revoke BTC’s position as legal cash, El Salvador’s President Nayib Bukele announced another positive BTC forecast. Owing to its finite supply of just 21M cryptocurrencies, Bukele made a prediction in a tweet on 31st January that BTC would eventually experience a massive price spike.

It’s only a question of time before we see a massive price spike. The Salvadoran president emphasized BTC’s rarity, stating that the globe possesses over 50M millionaires and that there’s insufficient BTC for every one of them to hold a minimum of 1 Bitcoin. Not even 50% of them will be able to eat. It’s only a question of time before we see a massive price hike, Bukele remarked. El Salvador’s BTC reserves have suffered significant dollar-denominated losses due to the recent BTC collapse. The Salvadoran government completed its initial 200 Bitcoin buy on 6th September, whenever Bitcoin traded for roughly $520K as previously disclosed.

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El Salvador Was Encouraged by the IMF to Repeal the BTC Law

Bukele’s remarks come after the IMF encouraged El Salvador to abandon its plan on making BTC a legal currency and instead focus on stringent control of the country’s electronic wallet. After a yearly discussion, IMF trustees encouraged the government to reduce the reach of the BTC law by eliminating BTC’s legal currency position, the International Monetary Fund stated in a press statement on Tuesday.

El Salvador became the first country to recognize BTC as legal money and the USD in September. For the past 2 decades, the Central American country’s economic system has been dollarized. The International Monetary Fund has frequently advocated for the action to be overturned, noting legal, economic, and financial problems as justifications. The IMF board of directors stated that increasing financial inclusivity is critical and that Chivo’s online wallet, the country’s BTC exchange, might help. Nevertheless, they believe that tight control and supervision of the novel environment are required.

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The International Monetary Fund study came after a dramatic price drop, with Bitcoin losing almost $10K in value between 20th January and 25th January, based on the data from CoinGecko. Bitcoin currently trades at $37.2K, down around 45 percent from its historically high levels of almost $68K set on 9th November.

The authorities hope that the susceptibility to BTC profits will attract investors who’d get a dollar outcome of 6.5 percent, significantly less than the market’s present pricing for equivalent Salvadoran public debt, which is nearer to 17 percent. According to the International Monetary Fund, the Salvadoran public debt can increase to roughly 96 percent of GDP in the next four years if existing debt expenditure rates are maintained, inconsistently putting the country.

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