If the price of an apple went up in BTC terms, that would tell you nothing about the value of apples; it would simply mean that bitcoin is having a bad day.
But lots of governments try to force citizens to do things they don’t want to–and citizens invariably find a way out.
Far better to acknowledge the criticism; admit that bitcoin is an immature asset with room for improvement; and explain why some of those improvements are closer than many people think.
Another important point: about one-fifth of the money flowing through the economy is sent to El Salvador from citizens living and working overseas.
Longer term, it can also give El Salvadorians the chance to hold a currency that is designed to appreciate in value over time, instead of depreciating.
Impoverished El Salvadorians are the ones paying them–perhaps $440m per year, given the global remittance sector’s average fee of 6.5%.
Westerners, in particular, find it difficult to understand how a 12-year-old digital currency dubbed “magic internet money” could be safer to hold than the US dollar, which has long been recognized as the world’s only reserve currency.
The Federal Reserve stopped publishing this data in February after five decades, to the consternation of many observers.
And if total wealth remains constant, then a higher money supply translates to a lower proportional value for each individual unit of currency–in this case, each dollar.
They have bitter personal experience: in Venezuela, local currency the bolivar has been devalued so egregiously that banknotes are now worth more as novelty items than as cash.
They cannot allocate their spare capital to assets that are nominally appreciating–property, precious metals, fine art and so on–because their spare capital is far too small to be efficiently invested .
It is deplorable that the richest people on the planet have become wealthier during the covid-19 crisis, due almost entirely to the self-serving monetary policies of central banks in the West.
Those citizens who choose to save a percentage of their money in bitcoin will–perhaps for the first time in their lives–be holding an asset class that meaningfully impacts their quality of life.
I am an aviation journalist turned crypto reporter whose work has appeared in The Guardian, The Economist, The New York Times, Flightglobal, African Business, Al Arabiya & New Eastern Europe.