Bukele predicted that more countries would adopt BTC as legal tender, but only the Central African Republic has done so. Although he said the launch of the volcano bonds would awaken interest, the recent price drop in the overall crypto market has prevented it.
Nayib Bukele, the president of El Salvador, has posted several predictions about Bitcoin for 2022 on his Twitter account. However, none of them has come true almost six months later, and they seem to move away.
All the tokens in the crypto market, especially Bitcoin (BTC), have suffered a sharp drop over the last few weeks. Its price has dropped by 69.8% from the high of nearly USD 68,000 it reached in November 2021.
About a year ago, the Salvadoran Legislative Assembly approved the so-called Bitcoin Law, establishing that cryptocurrency as legal tender. In addition, the government has invested over USD 160 million in BTC and Bitcoin bonds associated with the launch of its Chivo Wallet.
The Price of Bitcoin Will Rise to USD 100,000
The Salvadoran president predicted that the price of Bitcoin would increase to USD 100,000 this year. However, that is far from reality as it has dropped by 21%, reaching a 2020 low of USD 17,700.
An announcement by the cryptocurrency platform Celsius Network was one of the reasons for the recent fall. They suspended all transactions and stopped digital asset withdrawals, arguing extreme conditions in the crypto market.
President Nayib Bukele has announced ten Bitcoin purchases by El Salvador since September 2021. The government has accumulated 2,301 BTC purchased at an average of USD 47,500 per unit. That indicates that the Central American country has lost about USD 56 million due to the recent crypto market crash.
More Countries Will Adopt Bitcoin as Legal Tender
One of the predictions by Bukele that would boost the adoption of cryptocurrencies was that more countries would imitate El Salvador.
However, the only other country that has adopted BTC as legal tender so far is the Central African Republic. It is relevant to know that this nation has been under civil war since 2012.
Other countries have increased their interest in cryptocurrencies, but most have limited themselves to setting limits or launching investigations into CBDCs.
According to the Atlantic Council, 109 countries have become interested in CBDCs, but only ten have implemented them.
The Launch of the Volcano Bonds Will Create Excessive Demand
Bukele also predicted that the launch of the volcano bonds would awaken interest in them, creating excess demand. However, the government does not know when to do it, and finance minister Alejandro Zelaya has said the price of Bitcoin is still too low.
Experts consider that the recent drop in prices and the loss of value in the overall crypto market have prevented investors from purchasing cryptocurrency-backed bonds.
El Salvador must pay a USD 800 million bond maturing in January 2023. In addition, risk rating agency Moody’s downgraded the debt rating of El Salvador to CAA1, increasing fears of a possible breach.
Bitcoin is trading at around USD 20,886 and has accumulated a 2.3% gain over the last 24 hours. While its daily trading volume is above USD 25.87 billion, its market capitalization is about USD 398.37 billion, according to CoinGecko.
By Alexander Salazar
