This week in crypto. Sept 13-19: How is Bitcoin adoption going in El Salvador, Sneaky Vampire NFTs and more...
How is Bitcoin adoption going in El Salvador
On September 7th El Salvador became the first country in the world to recognize Bitcoin as a legal tender. 12 days in, how’s the adoption going?
Users. President Bukele tweeted that the state-sponsored Bitcoin wallet Chivo was downloaded by 1.1M people so far, despite the technical issues it experienced that made it incompatible with many smartphone models. 1.1M is 17% of El Salvador’s population, and at this rate Bitcoin would grant financial inclusion to more people than banks ever could (70% of Salvadorans are still unbanked).
Treasury. El Salvador’s government not only encourages its citizens to buy Bitcoin, it also puts its money where its mouth is. The country started hoarding bitcoins and as of today El Salvador officially hodls 700 BTC, diligently buying the dips (the last one was no later than this morning).
ATMs. By now El Salvador has installed over 200 Chivo ATMs in the country and 50 – in major US cities to facilitate remittances.
Protests. The Bitcoin law had its share of critics. Smaller protests against President Bukele’s bold ruling style started in July, and on September 15th a more significant group of protestors marched in San Salvador before setting a Chivo ATM on fire. One would wonder why people protest against being allowed to use Bitcoin alongside the usual dollar, but the protestors’ banners denouncing “money laundering” and “drug money” make it clear which Bitcoin misconception they have chosen to believe.
Of course, it is much easier to repeat popular anti-crypto slogans than to actually learn about the Bitcoin blockchain, which is quite ill-suited for money laundering (unlike the banking system… 😉) So while many a traditional media denounces President Bukele’s authoritarian methods, we would rather reiterate his calls for a better education.
Indeed, while a UCA’s poll in the beginning of September showed that 68% of surveyed disagree with the use of Bitcoin as legal tender, a poll conducted several weeks prior showed that 90% of surveyed did not know what Bitcoin was. So what’s better, try and instruct mostly very poorly educated people while enduring the decreasing buying power of the dollar, or strong-arm an alternative today? Mr Bukele made his choice.
Rating agencies. Dollar supporters outside El Salvador are not happy. The Bitcoin law has already brought on the IMF’s and World Bank’s ire (we wrote about these Bretton-Woods-born organisations earlier). “Global” rating agencies from New-York - Moody’s, Fitch and Standard&Poor’s - have also taken a negative stance. The Big Three warn of “negative implications” of the Bitcoin law on the credit rating, citing notably the falling out of grace with the IMF. The debate has come full circle…
The Bitcoin law is bold and unprecedented, and it will continue making ripples around the world. Notwithstanding media slandering or praise, it is important to keep in mind what Bitcoin adoption could give to El Salvador and its people:
- saving over $400M in yearly fees paid to fiat money-transferring services ( 23% of its GDP is made of remittances)
- having an alternative store of value to hedge from the dollar inflation (available to everyone)
- developing a high-added-value crypto industry (no capital gains on crypto exchanges is a great perk)
Art and NFTs
Bored Ape Yacht Club is an example of extraordinary successful NFT collection, based not only on cool drawings and rarity, but also on the sense of community. Owning an Ape gives access to community-only areas and special perks - and it works: Bored Apes are one of the most popular NFT collections, with some of them trading for millions of dollars.
This month showed that community-centered NFT trend is not over. One of the Bored Apes artists has launched another collection called Sneaky Vampire Syndicate, which in less than 2 weeks become 7th-most traded NFT collection with a floor price of over 2 ETH (vs minting price of 0.08 ETH).
It’s still far from almost 40 ETH now needed to buy a Bored Ape, but with enough efforts cultivating and animating the community, Sneaky Vampires could become a thing.
Bitcoin was traded sideways this week, falling as low as $43’400 and rising as high as $48’900, dipping as usual on Sunday night (and giving President Bukele a buying opportunity). It continue dipping at the time of writing.
Weekly events reflected rather well the general tendencies: PayPal launched its crypto service in UK, Microstrategy bought some more bitcoins, a statue of Satoshi Nakamoto was erected in Hungary, and ECB’s head Christine Lagarde declared “cryptos are not currencies” (3 times), officially becoming a meme.
We at D.Center would readily help Madame Lagarde figure out What is Money… Hope it’s not too late though.
Ethereum price essentially followed Bitcoin’s trajectory, but with more amplitude, raging from $3’100 to $3’680. It is decreasing at the time of writing below $3’180.
Quote of the week
“Bitcoin is volatile because it is in its early adoption stage. Amazon had the same volatile curve 24 years ago. But if you have put $10,000 on Amazon at its IPO, you would have $21 million today”,
Anthony Scaramucci, American financier and former White House Communication Director, founder of SkyBridge investment firm