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The first cryptocurrency has risen 30% in the last month, coming close to the $58,000 per BTC level. There are two reasons contributing to this move. They are crucial to understand what will happen in the coming years. So let’s focus on one of them in more detail today. And in upcoming articles on the other one.
BTCUSD
El Salvador has officially recognised bitcoin as a means of payment. Everyone has heard about it. But few have analysed the dynamics. And it is disastrous for the first cryptocurrency’s enemies.
The small state in South America is landlocked. The population is poor, even by the standards of Brazil and Argentina on the same continent. And almost 50% of families receive remittances from more fortunate relatives working in the US.
These remittances are probably where it all started. International payment systems such as Western Union charge a 5%-10% fee for the small amounts of remittances that Salvadoran citizens receive. But that’s hundreds of millions of dollars every year that just goes to waste in an already poor country.
Now all these commissions are effectively nullified. And all the money stays with the residents receiving the transfers. Yes, that’s not enough. Recognition of cryptocurrency means being able to pay for everyday goods and services with it. This has been made possible by the government, through a mobile app. Most of the country’s citizens have installed it.
And now for the worst nightmare for the IMF and central banks printing empty money. It turns out that 4 times more BTC is flowing into the wallets of Salvadorans than is going out. This is very, very important. That is, uneducated citizens, most of whom don’t even have a bank account, have realised the truth. Bitcoin, in their case, is not only a form of receiving transfers from abroad from relatives. It is also a substitute for banks + a means for investing, which they have been deprived of throughout their lives.
We’ve heard a lot of opinions on whether or not bitcoin is needed by the common people of planet Earth. In El Salvador, a real-time experiment has been put in place to show what’s in store for us in the coming years. Bitcoin will be recognised in many countries around the world. And their populations will start using it as a means of savings. And the more it is saved, the faster the price of the first cryptocurrency will rise.
08.00 German consumer price index for September
14.30 US Consumer Price Index for September
20.00 US Federal Open Market Committee meeting minutes
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