President Bukele seems too optimistic about the future of Bitcoin. The failure of PlanB’s model and the concerns of citizens tell a different story.
President of El Salvador, Nayib Bukele, has made predictions with respect to Bitcoin for 2022. Bukele is known to be a Bitcoin bull and has previously made tweets such as “Its game over for Dollar, Bitcoin is the Future”.
Despite the warnings from IMF against using Bitcoin as legal tender, El Salvador was the first country to adopt Bitcoin as Legal Tender, alongside USD on 7 September 2021. Ever since, Bukele has been buying Bitcoin regularly and has been holding it in reserves. The country’s Bitcoin reserve stood at 1,391 BTC (as of December 2021).
This comes amidst a sea of Salvadorans claiming that Bitcoin is vanishing from their state-run Chivo Wallets. The images of these alleged complaints were also shared by Mr. Whale, the crypto influencer.
PlanB had previously set a bitcoin target of $98,000 for November 2021, and $135,000 for December 2021 using the daily stock-to-flow price model. It does not come as a surprise that this prediction, as well as the model, failed. Because after its all-time peak in October 2021, Bitcoin was valued at around $46,000-$48,000 at the highest, just as the year 2021 ended.
The unpredictability of these models has not stopped Bukele from setting targets for this year, which seems unrealistic so far. It is further concerning that this comes when a mountain of complaints filed by the country’s citizens rose, regarding their disappearing Bitcoin.