Why Is Bitcoin Price Falling When Several South American Countries Embrace Its Revolution?
Rumors of an FBI hack of Bitcoin are just FUD. Focus on the real signal.
For a long time, I've been thinking that the first country to make Bitcoin a legal tender will go down in history forever. Just as Michael J. Saylor will forever be remembered as the first CEO of a major publicly-traded company to embrace the Bitcoin revolution, it would seem that El Salvador will hold that role as far as countries are concerned.
In early June 2021, El Salvador's President Nayib Bukele has just announced to the world his intention to make Bitcoin a legal tender in his country.
This proposed law will have to be passed by the Congress of El Salvador before it becomes a reality. In any case, it is a strong signal sent by El Salvador to the rest of the world. Nayib Bukele explains that Bitcoin will be used alongside the US dollar, which is currently the country's official currency.
For the president of El Salvador, Bitcoin will make it easier for Salvadorans living abroad to send money back home.
El Salvador launches Bitcoin adoption movement that spreads throughout South America
This is a bold move by Nayib Bukele, who believes it will create jobs in the short term while contributing to the financial inclusion of thousands of people outside the formal economy. It must be said that 70% of Salvadorans do not have access to a bank account. Bitcoin would give them direct access to basic banking services.
El Salvador's economy relies heavily on remittances, i.e. money sent from abroad, which represent 20% of the country's GDP. Current services charge prohibitive fees and can take days to arrive while having to be picked up in person.
For President Bukele, "Bitcoin will improve the lives and futures of millions of people”.
In the wake of El Salvador's announcement, several other South American countries have decided to publicly embrace the Bitcoin revolution. This ranges from Paraguay to Argentina, Panama, and Nicaragua. Many Brazilian politicians are also starting to give Bitcoin a wide berth.
Official recognition of Bitcoin in these countries would be a response to the will of the people, who did not wait for an official authorization to massively use the digital currency invented by Satoshi Nakamoto at the end of 2008.
For all these countries, Bitcoin is an opportunity to be seized to find a solution to the American dollar system which leaves them little chance of a better future.
Despite all this, the price of Bitcoin falls amidst rumors of hacking by the FBI
Despite all this great news for the revolution, you may have noticed that the price of Bitcoin has dropped again in the last few hours from just over $36K to $33K as I write this. A low of $32.2K has even been hit.
Many people have asked me over the past few hours why Bitcoin is seeing its price fall as countries announce their intention to embrace the Bitcoin revolution. This may indeed seem paradoxical.
There are two main reasons for Bitcoin's price drop.
The first is an announcement made by the US authorities on June 7, 2021, that $2.3 million paid in BTC to the hacker group DarkSide has been recovered. As a reminder, this hacker group had demanded ransomware from the American government during a cyber attack against the Colonial Pipeline in May 2021.
The U.S. authorities released a document explaining that the FBI was able to access the private keys of one of the hackers to recover the ransom directly from his wallet on the Bitcoin network.
Bitcoin has not been hacked by the FBI, nor will it be
For the media, it was very easy to make a shortcut with disastrous consequences for the general public's opinion: Bitcoin was hacked by the FBI. The spread of such a rumor necessarily frightened the market, which then quickly collapsed within minutes.
As is often the case, it is important to take a step back and analyze the facts. In the world of Bitcoin, you must learn to filter out the noise and focus on the real signal. That's how you can take advantage of this incredible revolution.
Those who have taken the time to analyze the documents can see that Bitcoin was not hacked by the FBI. No Bitcoin wallet has been hacked, and that is simply not possible. The Dark Side hackers had rented a cloud server on which the private keys were hosted.
The FBI obtained a subpoena to seize the server and take control of it. Once they had the private keys, it was a simple matter for the FBI to recover the stolen Bitcoin. It was simply a matter of performing standard transactions on the Bitcoin network. Nothing the average person can do.
Instead of being distracted by these FUD rumors, some like MicroStrategy continue to accumulate more BTC
So Bitcoin remains the most secure decentralized network in the world. A network that has never been hacked. It is important to repeat this so that you can understand that the media has simply propagated FUD (Fear, Uncertainty, and Doubt) information as it often does.
To this first reason was added the second classic reason: the psychology of 99% of the investors who do not know how to distinguish between the true and the false.
As soon as a rumor appears, these people panic and sell their BTC rather than trying to understand what the realities behind this rumor are. All these people who have a short-term way of thinking are missing out on the Bitcoin revolution.
Meanwhile, you have people who can take the long view and will take every opportunity to accumulate more BTC. This is how Michael J. Saylor announced on June 7, 2021, that MicroStrategy would issue $400 million in debt to buy more BTC.
As I always tell you, those who have the most faith in the Bitcoin revolution know how to be patient to win the accumulation game that is Bitcoin for years to come.
Michael J. Saylor will definitely be one of the winners by the end of the decade. Countries like El Salvador probably will too. Best of all, the people of these South American countries who embrace Bitcoin will be able to see their lives change for the better.
Rather than wasting time focusing on the ambient noise, this is what you need to focus on: the Bitcoin revolution continues to progress, and things are accelerating dramatically. It's up to you to seize this once-in-a-lifetime opportunity.
In Bitcoin We Trust
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