Post
Topic
Board Bitcoin Discussion
Re: El Salvador has become the first country to make #Bitcoin legal tender! 🇸🇻
by
Synchronice
on 22/03/2024, 21:10:32 UTC
Well, since it appears that after 2.5 years investing into bitcoin, el Salvador has gotten to nearly 5% of its annual revenues in bitcoin, just consider how many bitcoin the USA, Canada or any other developed country would have to buy in order for bitcoin to constitute 5% of its annual revenues.  Any country could try to buy BTC, but surely it would put way more price pressures on BTC if larger countries were engaging in BTC purchases, and in the whole scheme of things, El Salvador is pretty tiny - even though it could buy way more bitcoin without really affecting bitcoin's liquidity or to cause great slippage in the BTC price. 

As I mentioned earlier, El Salvador could be justified to buy close to $1 million worth of bitcoin per day, and that would still ONLY be around 5% of its revenues, and maybe some other countries might feel that they need to catch up to El Salvador in terms of percentage of their revenues, which would be much more difficult for larger countries to do without really greatly affecting BTC's price, which largely should show how early we still are when it comes to bitcoin's adoption and how much liquidity that bitcoin truly could absorb if some additional countries start to buy bitcoin and/or try to catch up to El Salvador in terms of percentage of their annual revenues.
I think that it would be best if El Salvador was about to buy 1 block each day instead of 1 bitcoin, i.e. buy the quantity of bitcoins that each block contain (i.e. 6.25 BTC per day till 21 April 2024 and then 3.125 BTC per day till the next halving and so on). I genuinely believe that such a plan would be far better in every possible way.
To be honest, I don't think it's a good idea to buy Bitcoin on a country level. It's okay for El Salvador and for small developing or probably developed countries but that's too dangerous for big countries like the USA, Germany, Japan and so on because there are too many things that has to be kept in mind, including what will happen if Satoshi arrives, who are the whales of this coin, what if there is a hard fork, etc.