Recently, Salvadoran President Nayib Bukele made a prediction on Twitter, that Bitcoin supposedly will see a “gigantic price increase”.
He backed up his insight by noting that Bitcoin has a limited supply of 21 million digital coins.
This took place soon after the International Monetary Fund requested the El Salvador government to eliminate Bitcoin’s status as a valid currency (legal tender). It was due to financial stability risks and consumer protection.
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If you were to look at the IMF’s report, you would see that it followed a big Bitcoin price decline. To be exact, (according to CoinGecko) in a period from January 20th to January 25th, Bitcoin lost approximately $10,000 of its value.
This was a huge loss to El Salvador’s Bitcoin reserves. Looking back, it was only September 6, when the Salvadoran government made its first 200 bitcoin purchase.
Then the journey continued. When Bitcoin’s market price was above $52,000 the government bought 420 Bitcoins. Later, On October 27th, Bitcoin traded around $58,000. In November El Salvador added some Bitcoin at approximately $54,000, and then more (at $49,000) in mid-December.
To get a better understanding, Bitcoin is down 45% from when it was above $68,000, and now trading at $37,159.
Furthermore, Salvadoran President talked about the Bitcoin dropdown, indicating that there are “more than 50 million millionaires” in the world, and there is a lack of Bitcoin for each of them. To be exact, he said “not enough for even half of them”.
