2024-12-12 19:46 |
El Salvador’s President Nayib Bukele has stirred global speculation after announcing the discovery of an estimated $3 trillion in unmined gold.
Notably, the revelation last week has sparked intense debate, with prominent Bitcoin advocate Max Keiser suggesting that converting this newfound wealth into BTC could drive the cryptocurrency’s value to unprecedented heights.
Taking to X on Thursday, Keiser underscored the urgency of acting swiftly.
“Only profitable if they sell the gold today (at a suitable discount) and buy BTC now. Since Bitcoin is demonetizing gold (to effectively zero), the pool of potential future buyers of gold is rapidly shrinking, and without buyers, the mined gold would have no value,” he wrote.
Keiser’s comments were in response to a speculative post by a follower suggesting that if Bukele used the gold reserves to purchase Bitcoin, its price could soar to $378,000 per coin, marking a potential 275% surge from current prices.
Interestingly, Bukele appears open to this strategy. On December 9, he tweeted, “And we’ll dilute that thing like there’s no tomorrow,” hinting at plans to mine and sell the gold in exchange for Bitcoin. Notably, his administration has already moved to repeal mining bans, paving the way for large-scale extraction.
Despite the enthusiasm among Bitcoin supporters, the proposal has drawn sharp criticism from those opposed to mining such an extensive gold reserve, who argue that it could result in severe ecological consequences and disrupt ecosystems and local communities. Critics also argue that prioritizing Bitcoin over gold, widely regarded as a stable store of value, could expose El Salvador to significant financial risks, given Bitcoin’s high volatility.
El Salvador’s journey with Bitcoin began in 2021 when it became the first nation to adopt cryptocurrency as legal tender. Despite widespread international criticism from the IMF, Bukele has remained steadfast, steadily increasing the country’s Bitcoin reserves. As of December 12, these reserves were holding 6,184 BTC valued at just over $574 million, reflecting unrealized profits of around $176 million.
That said, Keiser, known for his bullish predictions, has recently raised his Bitcoin price forecast to $2.2 million, citing growing confidence in Bitcoin’s potential to replace traditional reserve assets like gold. This sentiment echoes that of Michael Saylor, CEO of MicroStrategy, who has long advocated for Bitcoin as a superior alternative to gold.
If Bukele were to convert the $3 trillion in gold reserves into Bitcoin, it would create unparalleled buying pressure, potentially driving Bitcoin’s price to historic highs. While such a move could disrupt traditional financial systems, it would cement Bitcoin’s position as a dominant global asset.
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