Bitcoin surge: El Salvador president celebrates investment exceeding $600 million, Vancouver mayor consider similar move
Bitcoin surge: El Salvador's President Nayib Bukele celebrated as Bitcoin surpassed $100,000, boosting the govt's investment in the crypto token to over $600 million. And Vancouver mayor Ken Sim said the city would consider a similar move to diversify reserves.
Bitcoin surge: El Salvador's President Nayib Bukele celebrated as Bitcoin surpassed $100,000 level for the first time this week, hitting its all-time high and boosting the Central American government's investment in the crypto token to over $600 million, according to an AP report.
And now, Vancouver Mayor Ken Sim has said the city would also consider a similar investment in Bitcoin in order to diversify its financial reserves, as per a Bloomberg report.
At the time of writing, Bitcoin was at $98,300.56 (down 4.17 per cent from the previous day), as per data available on Coinmarketcap. The market capitalisation of the world's largest cryptocurrency is $1.9 trillion, the data showed.
El Salvador President Nayib Bukele Celebrates Vindication Over Bitcoin Bet
Bukele had in 2021 made a big bet on the cryptocurrency, adopting it legal tender in the country. Since the move, Bitcoin plummeted as low as $16,000 due to closely timed sector debacles such as the collapse of the FTX crypto exchange and the arrest of Binance founder Changpeng Zhao.
However, as of December 5, El Salvador's investment in Bitcoin crossed $600 million worth as the cryptocurrency broke the $100,000 level.
Through the year, especially since Donald Trump won the US elections, Bitcoin has rallied 45 per cent.
“It’s important to emphasize that not only did the opposition err resoundingly with bitcoin, but rather, differently from other issues (where they have also been wrong), this time their opposition affected many,” Bukele wrote on Facebook. The post also got a comment from Elon Musk on X (formerly known as Twitter), who simply wrote: “impressive” on December 5.
El Salvador’s former Central Bank President Carlos Acevedo was cautious, noting that while there have been gains, volatility was a persistent risk, AP report noted. “The average Salvadoran doesn’t use bitcoin, but obviously there are Salvadorans with economic resources who even before had already invested in bitcoin, but it is a small group,” Acevedo said.
The IMF also noted the country's Bitcoin investment in August, stating: “While many of the risks have not yet materialized, there is joint recognition that further efforts are needed to enhance transparency and mitigate potential fiscal and financial stability risks from the Bitcoin project.”
Vancouver Mayor Proposes Integrating Bitcoin Into City Finances
Vancouver Mayor Ken Sim has said that the City Council will on December 11 consider integrating Bitcoin into the city finances, Bloomberg reported, noting that Sim's party is a majority in the Council.
The motion proposed by Sim is titled, ‘Preserving of the City’s Purchasing Power Through Diversification of Financial Reserves — Becoming A Bitcoin-Friendly City’, the report added. The move aims to direct city staff to analyse the potential of accepting Bitcoin for taxes or fees or converting some of the city's financial reserves into the token.
Sim noted the gains made by El Salvador and the Switzerland city of Zug (which accepts Bitcoin for taxes) as examples. It also argues that such a move is pro-innovation. Vancouver is the capital of the British Colombia province in Canada.
(With inputs from AP and Bloomberg)
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First Published:6 Dec 2024, 01:55 PM IST
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