The growth of Bitcoin to be globally, and widely accepted, took a huge boost last week when it officially became legal tender in a sovereign state for the first time. The South American nation of El Salvador has backed Bitcoin to be a big part of its economy, even stating it could mine the cryptocurrency using volcanos!
The move in El Salvador means merchants will be decreed to accept BTC as payment for all goods and services. After El Salvador, legislators in other countries have expressed a desire to follow suit.
Should this trend continue, many countries may soon need to acquire and hold BTC in their reserves so as to be able to do commerce with other countries. Countries who are against the USD standard especially could start adding and using BTC as a fair standard measure for world trade and commerce.
This aversion to the US dollar, and preference for cryptocurrency, has already been seen especially by countries that suffer sanctions from the United States, like Iran.
While it does not look like a big deal for now, when other larger countries like Brazil, which has expressed a desire to also make BTC legal tender in their country, decides to want payment in BTC from their global trading partners, it becomes necessary for countries to hold BTC for world trade.
This could grow to become a huge movement where wealth is being transferred from no-coiners to BTC coiners. Very bullish for BTC for the mid to long term. It cements BTC’s position on the world stage and any country that planned to ban BTC and crypto will now have to rethink their stance, says PrimeXBT Analyst Kim Chua.
Interestingly, even with this large piece of news breaking positively for the cryptocurrency space, there has not been a huge move from Bitcoin, although the trend does seem to be reverting slowly back to a more bullish one.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.