El Salvador’s President Nayyib Bukele announced the distribution of bitcoins to every citizen of the country in the equivalent of $ 30 per person . Thus, the number of owners of cryptocurrency should grow by at least 2.5 percent in a very short time, considering that at the moment the population of El Salvador reaches 4.5 million people .
And this is important news – especially considering that the government cannot print coins out of thin air, as is usually the case with national currencies. Let’s talk about the situation in more detail.
El Salvador has indeed equated Bitcoin to its national currency. Now even Google knows that there are two currencies within the country – BTC and the dollar.
But the authorities did not stop at their decision. For example, on the eve of the President of Salvador Nayib Bukele explained how Bitcoin works for his nation through a presentation. This event is in video format.
The President of El Salvador just explained how #Bitcoin works to his entire nation via a powerpoint.pic.twitter.com/3erUefHGB2
– Documenting Bitcoin 📄(@DocumentingBTC) June 25, 2021
The founder of the Binance cryptocurrency exchange Changpeng Zhao approved the event. As he tweeted, “6 million people were added to the cryptocurrency ecosystem in one go.”
As a result, officials will also distribute the cryptocurrency to adult citizens. Thus, the latter will receive a tool to familiarize themselves with the world of coins and the advantages of decentralized assets based on the blockchain.
Where bitcoins are handed out
Given these figures, the government of El Salvador needs to spend at least $ 100 million to buy coins. This is good, because now any activity on the part of buyers in the market helps to keep Bitcoin above the important $ 30 thousand mark . Alas, the news in itself did not cause a sharp rise in the price of BTC, on the contrary: the cryptocurrency rate has dropped noticeably over the past day.
We checked the actual data: if yesterday the cost of Bitcoin was 35.5 thousand dollars, then this morning it fell to 30.5 thousand. From this we can conclude that statements of this magnitude are not enough to raise the value of an asset – at least in the current environment.
Although in the future the situation may change taking into account the activity of other states. As it became known the day before, the government of Paraguay presented a bill, according to which Bitcoin can be recognized as a legal tender within the country. And if dozens more states do this, then the demand for cryptocurrency will definitely grow – and probably with its rate.
It is not yet known exactly how many people should receive bitcoins. According to some estimates, the adult population in the country exceeds 6.5 million , according to Cointelegraph. Accordingly, El Salvador is likely to have to spend a lot more money to buy crypto.
It is noteworthy that in order to receive free coins, citizens will need to download a crypto wallet developed by a government agency. The application should work wherever there is a mobile internet connection. Moreover, for a transaction in BTC, Salvadoran users will not need to spend money to pay for a tariff plan.
In addition to the government of El Salvador, Twitter CEO Jack Dorsey is also contributing to the growth in adoption of the main cryptocurrency. On the eve, he announced the launch of an online conference called The B Word, designed to increase the popularity of Bitcoin among large professional investors. The first session of The B Word will take place on July 21, where prominent speakers in the field of blockchain and finance will be present. Among them are ARK Invest CEO Katy Wood, Blockstream co-founder Adam Back and even former CIA chief Michael Morell , according to Decrypt.
The B Word “aims to demystify and destigmatize the main myths about Bitcoin, explain how institutions can and should accept it, and raise awareness of different aspects of the cryptocurrency network . ” Along with the conference, The B Word will provide a resource library for institutions considering using BTC in their activities.
As you can see, from a fundamental point of view, there has been a lot of positive news for the blockchain industry lately. True, they are still not enough to “block” the flow of negativity from China, where the local government is actively fighting cryptocurrency mining.
We believe that over the long haul, Bitcoin and other coins will prove to be an important part of the world of finance anyway, so short-term market drawdowns are not particularly important. This point of view is also shared by billionaire Michael Novogratz, who actively invests money in blockchain projects, despite the market behavior.