In El Salvador, the cryptocurrency Bitcoin has been the official method of payment since the last quarter of last year. Now it has been requested to be modified again. This came directly from the International Monetary Fund (IMF). But El Salvador has not let the criticism sit, which in turn has angered the IMF. This raises a question for some market watchers: Is it still safe to invest in bitcoin in such a market environment?

Investing in Bitcoin 2022: IMF Sees Danger, Finance Minister Rebuts

Last Tuesday, January 25, the Executive Board of the International Monetary Fund weighed in on the situation in El Salvador. A statement from the organization said there are significant risks associated with the use of bitcoin, according to Deutsche Presse-Agentur. This applies both to financial stability and to the financial integrity of the country, as well as to consumer protection and the related "contingent tax liabilities". The newsletter goes on to say that the launch of the digital wallet "Chiva" in El Salvador encourages financial inclusion, but must also be strictly regulated in order for everything to continue as planned.

So the criticism doesn't just come from anyone. The International Monetary Fund has 189 member countries. The specialized agency of NATO was officially established in 1945 to provide loans to countries that do not have their own reserves. The Fund is financially independent and is headquartered in Washington, D.C., USA. El Salvador has been negotiating with the IMF on whether to approve a loan package. The presumed value is $1.3 billion.

Ricardo Castaneda:”The clearest scenario of why Bitcoin was adapted in El Salvador is the expectation of profits, we have to see how this benefits the population” pic.twitter.com/g9bACA5l0m

– Conversation with Ernesto López (@dialogo21), February 2, 2022

However, despite this dependence, they do not want to give in to these demands. said Alejandro Zelaya, El Salvador's finance minister. In fact, one of the reasons people decide to invest in bitcoin is that they can save about $400 million in commissions. This was reported by Handelskontor, a trade news portal.

Today, Ricardo Castaneda commented on the government's actual motivation in the news magazine The Conversation: "The most obvious case for bitcoin adoption in El Salvador is the expectation of profit."

Buy the Best Bitcoin Alternatives Now Luckyblock Investing in Bitcoin: The Salvadoran Experience

The US dollar has been the official currency of El Salvador for 21 years (since 2001). The former currency, the Colón, is currently being phased out. In September 2021, the cryptocurrency Bitcoin was added. However, as Salvadorans pay in dollars day in and day out, they are also becoming dependent on the proverbial trapped Federal Reserve. It remains to be seen whether the International Monetary Fund (IMF) will prevail and whether El Salvador decides to overturn the law in effect since September.

However, the new law states that every trader must accept cryptocurrency if he or she is able to do so. In other words, if the seller has the necessary technical equipment, he must accept bitcoin.

Taxes can also be paid nationwide. El Salvador is the first country to allow digital currency as an official means of payment. The law was originally proposed by President Naib Boucle. Buclair himself has been president of the peninsula since June 2019 and is highly respected both as a politician (he was mayor of the capital, San Salvador, from 2015 until he took office as head of government) and as an entrepreneur.

The new rule in the code says that the cryptocurrency Bitcoin is allowed as an official tender due to the country's economic growth. Tagesschau further justifies this by saying that "the circulation of digital currencies, whose value depends solely on market standards," is actually an important step in preventing the country from going bankrupt.

The new law has sparked numerous demonstrations and street protests in El Salvador. According to a survey conducted by the University of Central America (UCA) last August, a full 70 percent of the approximately 1,300 participants surveyed said they opposed the law. In addition, about 70 percent didn't even know exactly what bitcoin was, what it was used for or the pros and cons of the digital currency. To reassure Salvadorans, the government promised a starting credit of $30 per citizen. The announced start-up funds are available directly in the digital state wallet "Chiva", which can be downloaded by every citizen.

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It seems that observers should still be prepared for a tit-for-tat between the two sides. The entire fate of cryptocurrencies can be determined by the direction of El Salvador. This makes the topic very important for anyone who wants to invest in Bitcoin. This still seems to be for good reason.

Bitcoin is not only the most popular and well-known digital payment method, but it is not controlled by a central bank or monetary institution. Instead, digital tokens are created by a decentralized computer process. As a result, significant price fluctuations are part of the daily life of bitcoin investors. Even today, Bitcoin is down a whopping 4%. The downward trend of the past few weeks continues, which could put a strain on El Salvador's public finances. It is completely unknown if and when the rebound will be successful again.

Therefore, it should make sense to include alternative cryptocurrencies on your investment shortlist. The current hot tip is the Lucky Block token. After all, the digital currency based on the Coin Smartchain designates its intended use more precisely than Bitcoin. The aim is to create a decentralized lottery that will offer players better odds of winning and greater transparency thanks to the blockchain's automation.

However, these attributes alone do not make LBLOCK coins a purchase. But momentum did. The cryptocurrency team had to end the pre-sale early, as the tokens were sold earlier than planned. The following list is a direct result of the huge price jumps in the triple-digit percentage range. Thanks to an active community, a real bull market seems likely to trigger in the coming weeks and months. Since it's still not a well-known token, the profits here could actually be much stronger than Bitcoin. Maybe El Salvador will notice this soon.

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Photo by Chris Sabol