Key facts:
71.1% of Salvadorans consider that the Bitcoin Law did not benefit their family economy.
This is revealed by a study by IudopUCA amid the losses in BTC faced by the government.
El Salvador’s economic outlook is under the scrutiny of its citizens. Although the government has announced that inflation fell slightly in the last month, discontent is visible in the population due to the impact of bitcoin (BTC) as legal tender.
This is demonstrated by a report by IudopUCA (University Institute of Public Opinion of the José Simeón Cañas Central American University) published on June 2. The entity, which is located in El Salvador, announced, after carrying out a survey, that 71.1% of the country’s population considers that bitcoin law it has not benefited his family economy.
Also, it reveals that only 6.1% of salvadorans believe that their family finances have improved since the approval of the Bitcoin Law. The rest think that he benefited her only between something and little.
The result is considered representative of the total population of the country, after the survey was carried out on a sample of 1,275 people. This reality reflects a heavy blow to President Nayib Bukele, who last year established BTC as legal tender and carried out various actions with the cryptocurrency. The purpose of the investigation was to evaluate the public opinion of his third year as government.
El Salvador has big losses due to the bitcoin bear market
Part of the discontent of the population is triggered by the bear market that the cryptocurrency has experienced since November 2021. At that time, it reached its historical maximum price of USD 67,800 and is now worth USD 30,000, 55.7% less in a matter of a few months. Such a drop has made some salvadorans prefer to avoid having their funds in BTC for fear of further decline.
This was explained by José Fredy Landaverde, a 44-year-old Salvadoran who owns a clothing business, according to reported The nation. The entrepreneur said that accept transactions in bitcoin, as ordered by the law in the country, but as soon as he receives them he converts them into dollars to get out of the bear market.
“When the client pays us with bitcoin, we convert it to dollars immediately,” he confessed. But he assured that when the cryptocurrency rebounds, it will do the reverse operation. This is how you prefer to take care of yourself and take advantage of the price fluctuation that BTC has for your family economy. This is a common practice among traders around the world when there is a lot of volatility in the cryptocurrency market or forecasts are not encouraging.
Bitcoin bear market currently affects El Salvador
The purchases of the cryptocurrency made by the government as an investment, when its price was higher than now, have led to the current the national reserves in bitcoin are at a loss. Something that also generates concern in the population. According to estimates According to Bloomberg, the government’s holdings have decreased by $40 million in BTC due to its price drop.
With the last purchase of 500 BTC made by the government in May, El Salvador currently has a total of 2,301 bitcoins at an average price of USD 44,189according to the tracker Salvador Tracker. The value of BTC should rise above such a figure so that the reserves in the cryptocurrency that the country has are not in unrealized losses.
Furthermore, it was expected that the volcano bonds that the government would launch in Bitcoin City would bring investment to the country. However, its issuance has been postponed since March as they estimate that the current bear market is scaring away investors. This was said again on June 1 by Alejandro Zelaya, the finance minister, who reiterated that they will launch when the price of BTC rises.
All this The financial situation has generated concern among economic specialists about how the country will face the payment of the external debt which is due in June 2035. Carlos Acevedo, the former head of the Central Bank of El Salvador, said:
“It’s risky because it’s an extremely volatile asset, and it’s an investment that is entirely at the discretion of the president. He buys it on his phone when he wants to take advantage of the drop, but he doesn’t do it well because when he buys there is always a bigger drop ».
President Nayib Bukele, as well as his fellow government enthusiasts of the cryptocurrencyare convinced that the bullish future of bitcoin it will come at some point and benefit them. This was made clear in a recent meeting reported by CriptoNoticias with financial representatives from 44 countries who traveled to El Salvador to closely observe the adoption of BTC as legal tender in the country.