This was the week of El Salvador. Since President Nayib Bukele’s announcement in Miami at Bitcoin 2021 that El Salvador would adopt bitcoin as legal tender, the internet has been ablaze. The country’s parliament has since made it official, voting with a supermajority in favor of the bill. There have also been talks of setting up mining operations in the country and allowing investors with 3 BTC or more to take up El Salvadoran residency, prompting other Central American countries to signal interest in following their lead. I have long said that the first country to officially adopt bitcoin will be a pioneer and this week El Salvador did just that.
In other news: Elon Musk and Michael Saylor’s “Bitcoin Mining Council” launched their mission statement, China’s crackdown on crypto continued, former US President Donald Trump dissed Bitcoin, several wallet and mining firms raised fresh funding and US inflation hit its highest rate since the 2008 financial crisis.
Yes, many bits of bullish news this week would appear to be related to El Salvador, with most Bitcoiners hearing the country’s name enough times in the last week to last a lifetime, but the fun has only just begun. The nation:
- Announced Bitcoin’s adoption in the country to pass the bill.
- Offered solutions to mining and investment.
- And initiated a nationwide rollout.
All in less than a week, whereas something similar would take years in other countries wrapped up in bureaucracy. Countries such as Panama, and Argentina have expressed interest in following in their footsteps.
Besides that, Taproot has cleared it’s last hurdle over the weekend as it locked in, signaling a new chapter for Bitcoin. This “transition” was relatively smooth sailing compared to the blocksize squabbles of 2017, if you were paying attention back then. Then there is Michael Saylor and MicroStrategy raising more funds to buy bitcoin, and with the interest in the bonds they’re issuing being sky-high, there were rumors that the Fed would buy some as well.
Overall, it was a solidly bullish week in Bitcoin, and the news and major developments in the market are yet to be reflected in bitcoin’s price.
But not all news is good news. The “Bitcoin Mining Council” released their mission statement which possibly paves the way for centralization in mining. Not to mention Elon Musk is involved, who has proven time and time again that he might not have Bitcoin and the community’s best interests at heart.
Furthermore, India and China continued their onslaught on Bitcoin and the crypto market in general. Although no definitive steps have been taken, it is something to keep an eye out for. The International Monetary Fund (IMF) has been vocal about their disapproval of El Salvador’s bitcoin adoption and it’s likely that they are going to seek ways of attacking bitcoin and anyone associated with it, especially to dissuade more countries from following in El Salvador’s footsteps.
Taproot activation is a certainty at this point after it was locked in over the weekend. This soft fork will expand on Bitcoin’s smart contract flexibility, while offering more privacy in doing so, as covered in an extensive piece back in 2019. Taproot is set to activate in November and will greatly enhance Bitcoin’s current ecosystem.
El Salvador’s bitcoin adoption is a done deal. Investors such as Justin Sun have made it clear that they plan to set up shop in the Central American country as it opens up its borders and economy to Bitcoiners. The country’s plans to enable 100% clean bitcoin-mining through it’s geothermal volcanic power plants will quiet the haters who have (falsely) claimed bitcoin mining to be a large contributor to climate change and will pave the way for more miners to adopt green mining initiatives.
With US inflation hitting highs not seen since 2008, developing nations that have grown reliant on the US dollar as a reserve currency and hedge against inflation in their own countries are likely to favor bitcoin in the months and years ahead. This could prove bearish as everyone from the US government to the IMF, World Bank and others may push against Bitcoin and use their power and influence to combat bitcoin adoption.
What is most newsworthy, however, is the fact that El Salvador managed to announce and pass a bill with a supermajority vote in less than a week, showing their commitment to executing their plans and not just being “all talk.” Other nations are likely to follow, but El Salvador will be critical in establishing bitcoin as a “global standard” and showing the benefit of adopting it to other struggling and emerging economies, with African nations the most likely prospects to follow suit next.
Overall, the last week has been a truly game-changing one for Bitcoin. The price may not yet reflect that yet, and maybe won’t for a while, but Bitcoin is certainly becoming a household name and we are still in the early days. As many would agree, bitcoin’s price is highly undervalued at the moment.
This is a guest post by Dion Guillaume. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.