Bitcoin launch sparks wave of cryptocurrency speculation in El Salvador
- El Salvador’s plan, the brainchild of 40-year-old President Nayib Bukele, is the biggest test for bitcoin in its 12-year history
- The government’s new digital wallet, called Chivo which is slang for ‘cool’, comes pre-loaded with US$30 worth of bitcoin
Bitcoin has unleashed a wave of speculation in El Salvador since its adoption as legal tender last month.
Uber drivers, waiters and shop owners are day-trading the cryptocurrency on their phones, buying dips and selling rallies with a government app that comes pre-loaded with US$30 worth of bitcoin.
The government’s new digital wallet, called Chivo, was designed to facilitate bitcoin transactions, but the ease with which users can top up their balances and switch instantly between dollars and tiny, fractional amounts of the cryptocurrency makes it a perfect tool for speculation.
In the capital San Salvador, many large chains such as Starbucks, McDonald’s and supermarkets accept the digital currency for purchases, and some smaller businesses are also taking it. In the city’s downtown, electronics shop owner Santos Enrique Hernandez says he sees as many as 10 customers a day paying in bitcoin for the headphones, chargers and phone cases he sells.
Chivo, which is slang for “cool”, can be faster than cash or credit cards, he said. It also allows him to speculate on price swings, buying bitcoin when its price drops, then converting it back to dollars if it goes back up. He says he made US$12 in two days speculating on such movements.