El Salvador abandons Bitcoin as legal tender

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.

> 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.

What currency is stable in value? Certainly not the U.S. dollar.

A better way to put it is that a deflationary currency is, counterintuitively, not a particularly good currency.

The reality is, Bitcoin and similar, are not being used to actually purchase things. Not at any notable percentage. You're "best bet" is to horde it, and that doesn't make a good currency.

I come to these threads expecting criticism about bitcoin being funny internet money run by a small group of shady characters.

But most of the comments are about how stable currency and stores of wealth are actually bad! It kind of sounds like we think bitcoin is working.

If USD is inflating and Gold is staying still, is gold “deflating”?

What do you call someone who bought a pizza with BTC last year? Paper hands? Shouldn’t they have hodled and not had pizza? How can this be a currency.

> Shouldn’t they have hodled and not had pizza?

but then starved to death while hodling?

I don’t know that’s what I’m asking! Should you only spend your money in life or death situations in a btc economy?

If BTC was widely used as a currency then it would not be subject to nearly as much speculation. I don't know why this needs to be pointed out.

Is that a fact? Any substance you'd care to offer or just leaving that assertion hanging?

Intuition. If the majority of bitcoin usage was for transactions involving services and goods instead of speculative investment, there's a pretty strong case for a wager that the impact of speculative investment on its price would decrease.

I don't personally believe this will ever happen. BTC has too much legacy cruft. The "digital gold" narrative won out. Day-to-day transactions will happen in a newer, perhaps not invented yet crypto.