El Salvador: Bitcoin Scarcity Will Lead to a 'Gigantic Price Increase'
Bitcoin has had a rough month, falling from above $47,000 to below $34,000 over the first three weeks of the year.
However, with the cryptocurrency starting to show signs of recovery, El Salvador President Nayib Bukele tweeted a confident Bitcoin prediction on Monday, Jan. 31, amid calls for the country to remove Bitcoin as a legal tender.
A scarcity-fueled price increase
Bukele claimed that Bitcoin will see a "gigantic price increase" due to the scarcity of the digital currency — Bitcoin has a relatively limited supply of only 21 million digital coins. There are "more than 50 million millionaires" in the world, Bukele argued, meaning there is nowhere near enough Bitcoin for all of them to get in on the action.
There are more than 50 million millionaires in the world.— Nayib Bukele ?? (@nayibbukele) January 31, 2022
Imagine when each one of them decides they should own at least ONE #Bitcoin
But there will ever be only 21 million #Bitcoin
No enough for even half of them.
A gigantic price increase is just a matter of time.
"Not enough for even half of them. A gigantic price increase is just a matter of time," Bukele wrote. Bitcoin recently passed 90 percent of the total mineable supply, which was capped with a total of 21 million by its elusive creator, Satoshi Nakamoto, partly so as to reduce inflation that could arise from an unlimited supply.
The IMF 'urged' El Salvador to abandon Bitcoin
In September last year, the Bitcoin network crashed shortly after El Salvador made the digital coin a legal currency in the country. This month, reports emerged that the country may have lost $10 million as Bitcoin slumped worldwide. The International Monetary Fund's board has since "urged" the nation to abandon Bitcoin as legal tender, citing concerns over the cryptocurrency's "high price volatility," financial stability, and consumer protection.
The IMF's report came shortly after reports of Bitcoin losing about $10,000 in value between Jan. 20 and Jan. 25. According to CoinTelegraph, Bitcoin is currently trading at $37,159, down from its historical high of roughly $68,000 on Nov.9.
Disclaimer: Some members of the IE team, including editors of this article, have personally invested in a number of cryptocurrency and stock markets. However, their private investment viewpoints have no impact on editorial content.