Monetary coup – On January 18, 2022, rating agency Moody’s Investors Service announced that El Salvador’s credit rating remained unchanged. A financial information site had however indicated that Moody’s had downgraded El Salvador’s sovereign rating. This false information was followed by reactions, in particular those of an old enemy of bitcoin (BTC).
Nouriel Roubini vs Nayib Bukele: lessons in BTC economics amid slanderous accusations
The economist Nouriel Roubini accuses in his tweet of January 23, 2022, the president of El Salvador, Nayib Bukele, of having “ruined” his country by betting on bitcoin. They therefore ask to impeach that jester @nayibbukele a criminal president who is bankrupting the country! “. Nouriel Roubini aka Dr. Doom is known for his hatred towards bitcoin, spitting his venom against the cryptocurrency again and again.
El Salvador has now built up a stock of at least 1,801 BTC, taking advantage in particular of lows to buy bitcoins at lower prices. Bitcoin’s recent slump, which briefly took its price below $32,000 in January 2022 after hitting an all-time high around $69,000 in November 2021, speaks in favor of bitcoin’s detractors emerging for the time being. again and again the volatility argument to criticize cryptocurrency.
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Understanding bitcoin detractors (if possible): why so much hatred towards a geek currency?
How to explain this visceral hatred of Nouriel Roubini and other institutions like the International Monetary Fund (IMF) towards bitcoin? This hostility towards cryptocurrency can be explained either by:
- a lack of sufficient understanding of bitcoin : what is its use? What is its value based on? What about the fluctuation patterns of its price during the different cycles? etc
- defending the interests of fiduciary currencies and in particular the dollar : such a fear would then confirm the ability of bitcoin to replace fiats, if the defenders of the latter fail to stem the adoption of the cryptocurrency.
What will be the outcome of the standoff between El Salvador and traditional financial institutions or economists who want to kill the law giving legal tender to bitcoin in the country? The IMF has urged El Salvador to remove bitcoin’s legal currency status, disregarding the country’s monetary sovereignty. Will Nayib Bukele backtrack to calm things down? Or will he happily infuriate even more those people who ardently defend a traditional monetary system, having repeatedly shown their weaknesses, continuing to buy bitcoin dips and issuing against all odds the first government bonds based on cryptocurrency?
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