Many economic leaders like China and United States appear on the bitcoin hotspot list, but recently a Latin American country named El Salvador also appeared on this list. To get features like phenomenal trading calls, a live customer care support and better tips for trading you can visit platforms like bitcoin-eraapp.com. El Salvador made several announcements regarding the use of bitcoin before making it a legal tender. Many people were shocked how a virtual currency could become the national currency of a country, but El Salvador had a futuristic approach while making this movie.
In a recent tweet, El Salvador publically talked about the country’s gold reserve. As per reports, El Salvador has nearly 44106 oz. Gold and the current valuation of the entire gold reserve of this country is 79 million. And he publicly stated that if the government had purchased bitcoin of the same amount, it would have been worth $204 million by now. So here are some reasons why Nayib Bukele prefers bitcoin over gold.
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Bukele’s Statement!
He made statements after a speech showing the current market value of bitcoin and gold. If El Salvador had purchased bitcoin at the cost of $204 million, it would have been the third-largest reserve in the world.
El Salvador wholeheartedly believes that the government of many countries will soon accept this new currency, and according to him, “bitcoin is more important for our society than gold.”
In his speech, Nayib Bukele stated that cryptocurrency would change human history in the upcoming future, and its value will work like digital gold. But, at the same time, bitcoin is not just an investment but also a currency.
Bitcoin Vs. Gold- Why do countries prefer bitcoin more!
1. Low transaction charges
Usually, bitcoin transaction fees are less than 2 cents, but if we compare it with the actual cost of gold, it is not economical to store physical gold coins anymore. You have to pay extra 3-5% transaction charges while talking over the phone and transferring money via a bank account.
2. No fear of losing it
Gold is the most common investment item; many believe it has no risk of losing it. But what about bitcoin? This virtual currency has fewer chances of corrosion and loss due to theft or hacking. Only a few big companies can afford to provide security systems for their bitcoin systems for only a few months.
3. No need to keep it in banks
Many people think that bitcoin is the best option for earning money, especially those who are not willing to work for a long time and want to make instant money by holding some cash in their bank account. But in the case of gold, if a user has some bitcoin in their history and does absolutely nothing for a year or two, there is less chance of keeping that amount safe. As per reports, El Salvador has 44106 oz. Gold, and despite having this quantity, it would not be easy to save from anyone.
4. The price of gold is more stable
The cost of bitcoin is volatile; sometimes, it can increase or decrease by 20%, and sometimes, it can take months to recover from a massive decline. But the problem with gold is that its price has declined for decades. Not only this country but many other countries are also very active in using bitcoin over gold reserves. Here are some examples:
1. Venezuela:
Venezuela is also one of the famous countries that accepts bitcoin as a legal tender due to economic hardship and hyperinflation. In 2013 Venezuela had almost 5% of the world’s gold reserves; now, this country only has 1% of its total gold reserves. The government sold a considerable part of this country’s gold reserve in 2018, around $146 billion.
2. Iceland:
In 2013, Iceland also started experimenting with bitcoin by accepting it as a legal tender over their currency. It proved to be a very profitable move. The value of the bitcoin shot up, and currently, the country has almost half of its total gold reserves in bitcoin reserves.
3. Bangladesh:
In 2014, Bangladesh tried to convert its national currency’s denomination to bitcoin. However, the value of gold has also started declining due to inflation, and the government is concerned about this issue. So this country also started investing in bitcoin instead of gold.
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