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Cryptocurrency

El Salvador's President Bukele Celebrates Bitcoin's Historic High

2024-12-05

As the digital currency bitcoin achieved remarkable heights, surging past the significant milestone of US$100,000 for the first time, El Salvador's President Nayib Bukele exuded a sense of triumph on Thursday. His bold bet on this cryptocurrency has been a subject of much discussion.

El Salvador's Bitcoin Journey - A Game-Changer or a Risk?

Bitcoin's Historic Rise

Bitcoin's ascent to unprecedented levels captured the attention of the world. Just two years ago, it was trading below US$17,000, but with the events surrounding Donald Trump's election victory last month, it began a mighty rally. On Wednesday night, it exceeded the US$100,000 mark, only to fall back below it by Thursday afternoon, hovering just above US$99,000 by 4 pm local time. This volatile journey has been a rollercoaster for both investors and observers.The adoption of bitcoin as legal tender in El Salvador since 2021 was a significant move. However, its popularity never quite reached the same heights as the president's enthusiasm. The government's reported investment now stands at more than US$600 million, a substantial sum that reflects the country's commitment to this new form of currency.

The Impact on El Salvador

El Salvador, a tiny Central American country that has long relied on the US dollar, saw bitcoin as an opportunity to provide new avenues for its unbanked population. President Bukele promised that bitcoin would cut out money transfer services from remittances sent home by Salvadorans abroad. To encourage adoption, the government offered US$30 in bitcoin to those who signed up for digital wallets. Many took up the offer but quickly cashed out the cryptocurrency.There were street protests when the Congress made bitcoin legal tender in June 2021. These protests were not solely driven by the bitcoin decision; there were other underlying issues as well. Nevertheless, the move has had a significant impact on the country's economic landscape and the way its people view currency.

President Bukele's Perspective

President Bukele on Thursday pointed the finger at his beleaguered political opposition, claiming that they were responsible for many Salvadorans missing out on the bitcoin bonanza. His unwavering belief in bitcoin and its potential benefits for the country has led him to take bold steps. While the volatility of bitcoin poses risks, he sees it as a chance for El Salvador to break free from traditional financial systems and embrace a new era of economic growth.In conclusion, El Salvador's journey with bitcoin is a complex and evolving story. The highs and lows of bitcoin's value, along with the political and social implications, make it a topic of great interest. Only time will tell how this experiment will unfold and what impact it will have on El Salvador and the global cryptocurrency market.

Donald Trump has made a significant move by naming venture capitalist David Sacks to a newly created role within the White House. This choice is seen as crucial in the context of two areas that are vital to the future of American competitiveness, as stated in a Truth Social post. Sacks brings with him a diverse background and extensive experience in the business world.

David Sacks' Background and Associations

Sacks is the co-founder of venture capital firm Craft Ventures and was an early COO of PayPal. He is part of the renowned "Paypal Mafia," a group of former workers and leaders of the company. Additionally, he is the founder of social networking site Yammer and a former chief executive of software company Zenefits. These experiences have equipped him with valuable insights and skills.

His Role in the Republican National Convention

During the opening night of the Republican National Convention in July, Sacks took the stage. In his speech, he didn't shy away from expressing his views. He used a portion of his address to criticize his hometown of San Francisco, highlighting the challenges faced due to what he described as "Democrat rule turning the streets into a cesspool of open encampments and open drug use." This shows his willingness to voice his opinions on important issues.

His Involvement with Ron DeSantis

Sacks has been actively involved with Florida Governor Ron DeSantis. He donated $300,000 to DeSantis' re-election campaign and became a close adviser. In May 2023, he hosted the glitch-filled conversation between Musk and DeSantis on "Twitter Spaces," which was intended to launch DeSantis' GOP presidential primary campaign. However, the event faced numerous technical difficulties and started 25 minutes late, plagued by repeated crashes. This incident had a significant impact on DeSantis' campaign, turning it into a national joke and likely affecting his performance in the Republican primary.

The Implications of Cryptocurrency and AI

Cryptocurrency is increasingly becoming a domain associated with scammers and criminal money laundering operations. Alongside its massive energy consumption, wasteful water use, and pollution, it poses significant challenges. On the other hand, so-called "artificial intelligence" software is linked to an even larger waste of water and rampant copyright theft. These are important considerations in the context of Sacks' new role and the future of these industries.

Bitcoin, the digital currency that has been making waves, has seen a remarkable surge in value. It surged more than 40% since Election Day and reached an unprecedented $100,000 on Wednesday. This has led to a significant increase in total returns, with people witnessing over 100% growth. The reason behind this surge is attributed to President-elect Donald Trump's interest and support for crypto. However, it has left many Americans wondering if it's too late to get a piece of the bitcoin.

Perspectives on Bitcoin Investment

Is It Too Late?

Mike Douglas, the President of LifePlan Financial Design, believes that while it's too late to get the full run-up, there are still opportunities. He emphasizes that making a risk investment like bitcoin is highly speculative, with days of both extreme gains and losses. "Is it too late? To get the full run up, yeah it is too late but there are still opportunities. To make a risk investment like that is very speculative and so there is going to be days when it’s really bad and days when it’s really good," said Douglas.

The Impact of the Federal Reserve

Tom Shohfi, a Professor of Finance at Wayne State University, highlights the role of the Federal Reserve. "We’re talking about a run up from the 70,000s now to over 100,000. I think it’s just been riding momentum, there have been a lot of things that have happened since the election, today for example, the chairman of the Federal Reserve came out and said bitcoin is digital gold which is a very positive comment by the Federal Reserve chair," said Shohfi. This positive comment from the Federal Reserve has further fueled the growth of bitcoin.

Mid-Michigan's Perspective

People in Mid-Michigan remain wary of cryptocurrency due to its online nature. "When people have FOMO, the fear of missing out on the biggest thing, or the old phrase pigs get fed and hogs go to slaughter, we don’t want to overly weigh towards a highly risky investment even though it’s doing well. You have to be appropriate about how you invest it," said Douglas. This shows the cautious approach of the local community towards bitcoin.

Risks and Recommendations

Experts stress the importance of not investing money that one can't afford to lose. "The downside is that it’s not like putting your money in the bank, it’s extremely volatile, the prices go up a lot, the prices go down a lot. I would say a small percentage of your portfolio would be a good thing but don’t get too aggressive otherwise you could really get hurt if we see a lot of pullback," said Shohfi. They also recommend getting informed before investing in crypto.Subscribe to our News 10 newsletter and YouTube page to receive the latest local news and weather. Looking to hire people, or grow your business through advertising? Gray Digital Media is your one-stop marketing solution. Learn more.Copyright 2024 WILX. All rights reserved.