Why this executive predicted that Bitcoin will be legal tender in 5 countries

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Bitcoinist has closely followed the deployment of the Bitcoin Law in El Salvador. Via the National Congress, this country gave BTC legal tender status, the implications of this action are still being studied but point to a new phase of adoption for the crypto industry.

Related reading | News from El Salvador, early October: stress testing Chivo ecosystems

In a recent article, crypto exchange BitMEX CEO Alexander Hptner took a closer look at the situation in El Salvador, the reasons Bitcoin makes sense in developing countries, and the opposition given by international financial institutions. Hptner made the following prediction:

My prediction is that by the end of next year at least five countries will accept Bitcoin as legal tender. All will be developing countries.

The executive based its arguments on the importance of Bitcoin in countries like El Salvador. Long forgotten by the traditional financial system, they have little or no influence over the decisions of the US Federal Reserve and other major central banks around the world.

They generally have an impact on the way their citizens live, trade, send money from abroad. The COVID-19 pandemic has proven that central banks are willing to increase their money supply, create inflation, and affect their populations in order to keep the system running.

Bitcoin is a way to opt out of this system or, at the very least, as Hptner said, choose to try something new. The executive said:

What critics fail to recognize is that developing countries like El Salvador are leading the world in embracing decentralized digital currencies and payments. They have had decades to analyze how the global financial system works and does not work for their people.

The three factors that will drive Bitcoin adoption

According to the CEO of BitMEX, there are 3 main variables that will play an important role in fulfilling his prophecy: remittances, politics, inflation. The former is one of the most relevant use cases for Bitcoin and one of the main reasons El Salvador decided to implement its BTC law.

Related reading | By the Numbers: How much will Western Union and MoneyGram lose from Salvadoran Bitcoin law

For the executive, remittances are a factor that cannot be overstated, especially in developing countries around the world. In El Salvador alone, remittances represent more than 20% of the country’s GDP in 2020.

Citing data from the World Bank, Hptner claims that 75% of global remittances are received by low- and middle-income countries.

Much of this is lost to third-party companies providing the service, until a population finds out how much cheaper it is to send money through Bitcoin or its second-layer solution, Lightning. Network. The CEO of BitMEX said:

Remittances of US $ 540 billion reached low- and middle-income countries in 2020. This number would be much higher and families in developing countries would be in a better position with a cheaper method of sending remittances. .

Additional data cited by IMF Hptner projects average inflation of 5.4% for developing countries and 2.4% in developed countries. This will encourage people to seek alternatives to fiat currency and traditional investments to protect themselves from the impact on consumer goods and services.

As an example, the executive mentioned the increasing adoption of crypto in Turkey. The national currency of this country has been severely affected by inflation. Conversely, the adoption of Bitcoin and crypto has increased.

Finally, Hptner pointed out that the Bitcoin law in El Salvador will force other politicians from different countries to try and implement similar measures to their advantage. Crypto has become a cultural touchstone, a symbol of the lack of trust and faith in traditional institutions.

Related reading | The President shows the first steps of the Bitcoin mining platforms of the El Salvador volcano

Thus, politicians could attempt to capture the interest of young people and those who have lost faith in the status quo. This has the potential for great success, but not without its risks:

() It is also true that any failure of these leaders in the implementation phase can hamper wider adoption of cryptocurrencies in general. This is the dangerous dilemma that awaits us.

At the time of writing this article, BTC is trading at $ 55,130 with a 1.8% profit on the daily chart.

BTC with a small profit in the daily chart. Source: BTCUSD Tradingview

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