The apparent resilience of bitcoin at around one hundred thousand dollars and the evidence of its good long-term functioning as a store of value seems to be encouraging more and more actors to consider its possible development as an alternative to traditional money in general, and the dollar in particular.
For El Salvador, it seems evident that Nayib Bukele’s risky experiment clinging to bitcoin to save its economy is succeeding: last Friday, the country’s government He acquired more than eleven bitcoins worth $1.07 million and made another identical purchase on Sundaywith the provisional goal of acquiring twenty thousand more bitcoins. The country already accumulates reserves of $574,000,000 in bitcoins, and has just close an agreement with the International Monetary Fund for a loan of 1.4 billion dollars in exchange for reducing its political disputes regarding the internal adoption of cryptocurrency, in an attempt by the institution to postpone the problem that seems like it could come upon it if the country’s example spreads.
But El Salvador, a very small and unrepresentative economy, is far from the only country with ambitions linked to bitcoin. A country also very small, but much more important in the global economic panorama, Singapore has just surpassed Hong Kong in the race to attract companies related to cryptocurrenciesin its race to try to become a business center related to that growing alternative economy.
While, Russia is increasingly turning to bitcoin in its foreign trade operationsin an attempt to counter Western sanctions that are complicating transactions with its main partners, such as China or Turkey. Local banks in these countries are being very cautious with Russia-related transactions to avoid scrutiny from Western regulators, which has led Russia to not only allow the use of cryptocurrencies in foreign trade, but also take steps to legalize cryptocurrency mining, including bitcoin.
Russia is already one of the world leaders in bitcoin mining, and intends to use those bitcoins mined in the country to expand and further develop its international transactions, something they believe will happen throughout the next year 2025. The country’s president, Vladimir Putin, supports the extensive use of cryptocurrencies, believes that international payments in digital currencies represent the future, and points to bitcoin as a good example of these alternative transactional assets, mainly because no one in the world can regulate it.
With Donald Trump advocating for a weaker dollar to favor his foreign trade and considering investing in the creation of a federal reserve in bitcoins, it is difficult to know what will happen in the future, but it seems very unlikely which is unfavorable for those who have trusted bitcoin and other reliable cryptocurrencies such as Ethereum as a store of value and as a transactional model. Times, without a doubt, are changing. I have to remember to tell a few friends in the Economics Department at my university…