El Salvador, a small Central American country made history just over a year ago when it created Bitcoin is a legal tender that recently celebrated its first year of accepting BTC.
The Salvadoran government identified BTC as a tool to attract foreign investment, create new jobs and reduce dependence on the US dollar in the country’s economy at the time of its adoption. Many BTC supporters and the libertarian community rallied around the small country despite mounting pressure from global organizations such as the World Bank and the International Monetary Fund (IMF) to remove BTC from legal tender.
A lot has changed in the last year since El Salvador became the first “Bitcoin country”. Enthusiasm and public interest immediately rose after learning about BTC as the price soared to new highs.
The president of El Salvador, Vice Bukele, joined the growing league of bitcoin supporters to buy into more market failures, and even reaped the benefits of his bitcoin purchases in the early days as the country built schools and hospitals at a profit.
However, as market conditions turned bearish, the frequency of BTC purchases decreased, and the president, who was often seen interacting with the crypto community on Twitter and sharing Bitcoin future endeavors, dramatically reduced his interactions with social media.
El Salvador has bought 2,301 BTC since last September for $103.9 million. This bitcoin is currently worth about $45 million. The last purchase was made in mid-2022 when the country bought 80 bitcoins at $19,000 each.
With the price of BTC dropping, critics who have long expressed concerns about the crypto bubble felt justified, with comments such as “I told you so.” However, market experts believe that El Salvador’s experiment with Bitcoin is far from a failure.
El Salvador’s Bitcoin Volcanic Bond, a project aimed at raising $1 billion from investors to build a Bitcoin City, has already been delayed several times, and doubts are growing not only about the project, but toward the adoption of BTC itself.
Contrary to popular outside belief, Samson Moe, a Bitcoin entrepreneur who played a key role in the development of the Bitcoin Volcanic Bond, also called a volcanic token, told Cointelegraph that El Salvador is building a bear market. He noted that the Volcanic bond issue has been delayed for several reasons and is currently awaiting passage of the Digital Securities Act. It is to explain:
“We are still waiting for the new digital securities laws to come to Congress and once they are passed, El Salvador can start raising capital for its bitcoin bonds. I hope this happens before the end of this year. Like bitcoin companies, El Salvador has focused on building in the bear market. I don’t see President Bukele. He doesn’t stock more at these prices.”
BTC price hit a new all-time high of $68,789 just one month after passing El Salvador on November 10. However, the price has since fallen by more than 70% and is currently trading around $19,000. Many critics believe that the future of volcanic bonds and their native token is highly dependent on the cryptocurrency market and therefore can only gain momentum during bull markets.
Paolo Ardoino, chief technology officer at Bitfinex, told Cointelegraph that the volcanic token will generate interest from investors regardless of market conditions:
“The volcanic token will be the first of its kind. While investor appetite for new offerings is typically higher during a bull market, we are confident that the unique offering this token represents will generate significant interest regardless of market conditions. The volcanic token enjoys broad support in the Bitcoin community and from Obviously there is a lot of demand for supply, whether we’re in a bear market or a bull market.”
Bitfinex is the main infrastructure partner of the Salvadoran government responsible for processing transactions for the sale of volcanic tokens.
Bitcoin adoption boosts remittances and tourism
While critics have called the Bitcoin experiment in El Salvador a failure from the start, proponents see it as a revolution of some kind and believe that the implementation of El Salvador could create a domino effect for other countries with similar economic problems, such as the large numbers of unbanked citizens. Services and large transfers. sizes.
Bukele previously mentioned that the main focus of BTC recognition was banking services for more than 80% of non-bank salvodrans.
