El Salvador's bitcoin-loving president Nayib Bukele says scarcity means 'gigantic' price increase for the crypto is just a matter of time
El Salvador's president on Monday projected a "gigantic price increase" for bitcoin.
- The jump would stem from the world's 50 million millionaires seeking to own at least one bitcoin, he said on Twitter.
- Bitcoin's price has lost about 18% this year as part of a sell-off in risk assets.
Bitcoin's price should experience a "gigantic" rise, said El Salvador President
The projection comes as bitcoin has slid by nearly 20% this year and days after the International Monetary Fund called on the country to stop using the digital coin as legal tender.
"A gigantic price increase is just a matter of time," said Bukele in a Monday post on Twitter. He centered his case on bitcoin's supply cap and his estimate that there are 50 million millionaires in the world.
"Imagine when each one of them decides they should own at least ONE #Bitcoin. But there will ever be only 21 million #Bitcoin," he said. "No[t] enough for even half of them."
The 40-year-old leader didn't specify by how much he sees bitcoin moving higher or a time horizon for such price action.
The world's most traded cryptocurrency turned higher during Monday's session, moving around $38,470. The price has been knocked down by roughly 17% in 2022 as part of a massive sell-off in cryptocurrencies and other risk assets as investors get ready for the Federal Reserve to raise interest rates quickly this year to combat hot inflation. Goldman Sachs on Friday increased its outlook for 2022 rate hikes to five from four, citing strong wage growth.
Bukele spearheaded his country's adoption of bitcoin as a legal currency in 2021. Businesses there last September were required to start taking bitcoin as payment for goods and services.
But last week, the IMF urged the Central American country not to use bitcoin as legal tender. The digital asset "entails large risks for financial and market integrity, financial stability, and consumer protection," the IMF said. "It also can create contingent liabilities."
Directors at the IMF also called on stricter regulation for Chivo, the country's official e-wallet, and expressed concern over the risks associated with issuing bitcoin-backed bonds. Bukele said last year El Salvador will aim to raise about $1 billion via a bitcoin bond.
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