El Salvador Faces Flac For Bitcoin Purchase With Taxpayer’s Money

Paigambar Mohan Raj
Source: DigFin

As we bid farewell to June 2022, we have witnessed the worst-performing quarter for Bitcoin (BTC). BTC fell by nearly 56% in this quarter. However, it could be said that the environment is just about right to enter the crypto markets.

El Salvador is undoubtedly one of the most bullish nations regarding Bitcoin. Just today, president Nayib Bukele announced the purchase of 80 additional Bitcoins for $19,000 each. This is, on average less than half of what it paid for its previous purchase. The nation has purchased BTC on almost every dip, which seems to be a popular strategy for the country. This, without a doubt, has reduced the average cost of each BTC in its treasury.

Till today, El Salvador has spent over $100 million on Bitcoin. After the recent slump, its reserves are worth less than half of that.

Criticism of El Salvador’s Bitcoin purchase

Although many celebrate El Salvador’s purchase, some have criticized Bukele.

Among the critics is Eric Voorhees. Voorhees is the founder of ShapeShift and an early adopter of crypto. Voorhees was not on board with the country’s Bitcoin purchase and shared his thoughts on Twitter.

Voorhees’ post came in hours after Bukele’s announcement. Voorhees has criticized governments as a concept, and he has previously spoken out against taxation, often calling it theft.

In this case, Voorhees seems to be against the El Salvadorian government using taxpayers’ money to purchase BTC. Although the nation is bullish on Bitcoin, that notion might not necessarily reflect the belief of its citizens.

While companies like MicroStrategy invest in Bitcoin with investors’ consent, a nation like El Salvador does so without, and citizens rarely have a say in matters of such magnitude. Therein lies the fundamental problem with the nation’s BTC law for many.

Bukele has also faced criticism from Ethereum co-founder Vitalik Buterin as well. Buterin spoke out against businesses being forced to accept Bitcoin as payment. And asked the crypto community not to praise the president.

Moreover, many residents have also spoken out against the Bitcoin law.

El Salvador’s primary motive in accepting Bitcoin was to bank the unbanked. However, this goal seems to be forgotten entirely. Reports have shown that many citizens stopped using the state-sponsored Chivo wallet after receiving the $30 BTC incentive. Moreover, the same information highlighted the fact that most people did not fully understand crypto.

At press time, BTC was trading at $19,306.93, down by 8.5% in the last seven days.