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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 1 comments | 04 Feb 25 00:00 UTC | HN request time: 0s | source
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ggm ◴[04 Feb 25 00:12 UTC] No.42925329[source]▶
Speculative asset class fails as non-speculative legal tender class.

If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems.

Like a lot of people, I probably fall into severe errors which would be bread and butter for "bad economics" reddit groups but truly, I can't see how this wasn't forseen and expected. It was about WHEN, not IF.

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codethief ◴[04 Feb 25 01:39 UTC] No.42926355[source]▶
> Speculative asset class fails as non-speculative legal tender class.

This. Bitcoin proponents often claim that eventually everyone will use Bitcoin for payments ("Finally no more governments or central banks!") and that's why it will increase in value, so everyone should invest in BTC.

But this argument is fundamentally flawed: A currency, in order for it to work (in order for people to be able to trust it), needs to be stable in value. Which contradicts it being an investment vehicle and drastically varying in value over time.

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mikepurvis ◴[04 Feb 25 01:48 UTC] No.42926450[source]▶
And quite apart from that fundamental misalignment, sovereign states having some measure of control over their own monetary policy is arguably a pretty good thing.
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1. mindwok ◴[04 Feb 25 02:03 UTC] No.42926617[source]▶
And on top of that, consumers prefer institutions in the loop. That’s why people use Amex to pay for stuff, because if it goes wrong you’ve got a massive institution with a tonne of clout to help you out.