Bitcoin tumbles 10% as El Salvador adopts it as legal tender

CNBC ^ | Tuesday, September 7, 2021 | Tanaya Macheel

[SunkenCiv]

• Bitcoin Erases 2021 Gains. It’s the ‘Ultimate Risky Asset Right Now.’
• A bunch of MIT students got $100 of free bitcoin in 2014 – some got rich, some wasted it on sushi

[SunkenCiv]

Good luck with that -- although among smaller countries, it could wind up becoming a de facto unified common currency.

[neefer]

I wish El Salvador and Presidente Bukele the best. He’s done some amazing things in 3 years. San Salvador went from the murder capital of the world to being safer than many U.S. cities. He declined to meet with the Biden administration. And giving the middle finger to the IMF puts a target on himself. I hope he’s got a taste tester and doesn’t fly much.

[Pollard]

I would think they’d use some kind of stable coin instead of something that might be $50k this week and $30k next week.

[Larry Lucido]

Sounds like an excellent buying opportunity (channeling bitcoin hawkers).

More seriously, my expert opinion is that folks should either HOLD, SELL or BUY.

[Dilbert San Diego]

Isn’t the whole point of bitcoin that it is outside the world’s monetary system, outside the ccontrol of any government?

[neefer]

Accepting it as a form of legal currency isn’t the same thing as controlling it. But Bitcoin’s flaw is that it requires a lot of energy to mine. There are only a few companies that mine it and they’re all in cold weather climates that don’t require cooling. If anything, El Salvador is improving to its decentralization.

[BiglyCommentary]

Don’t be a troublemaker and impose real world “stuff” on the coin hobbyist’s dream.

[amorphous]

More seriously, my expert opinion is that folks should either HOLD, SELL or [and] BUY.

Works for me.

[Kevmo]

Is that a cryptocurrency ping list? Can you pls add me to it? I thought I was already on one but I could be mistaken.

[frogjerk]

Is this a crypto list? If so, please add me.

[Kevmo]

The attraction is that it’s not tied to any other nation’s capricious monetary policies.

[neefer]

I would think they’d use some kind of stable coin instead of something that might be $50k this week and $30k next week.

It depends if you view volatility as good or bad. If you bought at $30k and sold at $50K that's one hell of nice gain in a short period of time. Unless you're quite wealthy, it would be difficult to make that type of gain in stocks within a week.

Sure, the stable coins that are tagged to the dollar don't fluctuate, but you're not going to gain anything. In the 50 years since Nixon took us off the gold standard, the dollar has slowly lost its value. Biden is trying to accelerate that trend.

[corkoman]

But Bitcoin’s flaw is that it requires a lot of energy to mine. There are only a few companies that mine it and they’re all in cold weather climates that don’t require cooling.

Most of the bitcoins have been mined. Those were the low-hanging fruit as it were. There are actually thousands of computers chugging along vying for the remainders some of those are "organized" farms and being in arctic circle locales means lower cooling costs. There remains thousands of individuals with PCs running the math program round the clock - mostly enthusiasts with money to burn.

I wish the El Salvadorans had not cozied up with CCP who are gaining ground in Central and South America. And stop sending us their criminals and sick.

[DesertRhino]

What stable coin are you referring to? Gold? Or another crypto.

[neefer]

There remains thousands of individuals with PCs running the math program round the clock - mostly enthusiasts with money to burn.

Indeed. There isn't much incentive to mine Bitcoin. Obviously, those who got in early made the most from it. And I've heard many of those people say "I'll never sell my Bitcoin." But I can't see it going higher than $100K in the near future then slowly fading into irrelevance. It can't handle the transaction speed of newer coins. My money is on Solana (which it the only major coin that hasn't dropped yet today).

[Pollard]

Crypto pegged to gold, silver etc. They also have some that are pegged to the USD. 1 coin = 1 USD

[Boogieman]

That’s actually similar to a legitimate investment strategy... bought when it was too high and the price drops?? Keep buying more, so the average price of your holdings is lower than when you originally bought it, and then you make more profits when you eventually sell.

Of course it doesn’t work if the investment never goes back up again. Every system has a flaw.

[DesertRhino]

“Sure, the stable coins that are tagged to the dollar don’t fluctuate”.

But it’s tagged to the dollar. If you wanted to make that nutty move, why not just tag your currency to the dollar and cut out the middleman?

[Pollard]

Well they may have just lost 10% as per the article title. Being Brazil, they should create a crypto that’s pegged to the price of beef.