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El Salvador Blazes The Future Of Decentralized Finance On “Bitcoin Day”

Raymond’s views on El Salvador becoming the first nation in history to recognise Bitcoin as legal tender and how to handle the recent flash crash.

Yesterday, the Central American country El Salvador took a giant leap for the cryptocurrency and blockchain industry by becoming the first country in history to recognise Bitcoin as legal tender. I applaud El Salvador as they have crossed a milestone in Bitcoin’s history and will be remembered as the country that first started on this daring and inspirational journey.

But plans never go exactly as planned. 

The rollout was rocky to say the least and faced many technical issues. The government designed Bitcoin wallet Chivo was planned to be released on Huawei, Google, and Apple app stores at midnight, but it wasn’t available to download until the early morning. 

When applications were downloaded, some people claimed to still have issues. This led Chivo to temporarily go offline since a lack of server capacity prevented people from entering their data, an important step in setting up a wallet and for them to receive their free $30 of Bitcoin. There were other problems too, including users unable to send funds.

Within hours of rolling out the platform, Bitcoin’s price fell almost $10,000 with traders trying to figure out if its rapid drop was linked to Salvador’s bumpy rollout of its Bitcoin wallet and where the market will go from there. 

The sudden drop in Bitcoin’s price may scare some investors, but I have faith in the transformational power of Bitcoin and its underlying blockchain technology. As a long-term cryptocurrency investor, I view this drop as simply another flash crash that we in the industry will successfully navigate through, as we have done through other volatile cycles in the cryptocurrency market. 

The fundamentals of Bitcoin remain strong and it's clearly being more accepted across the world. Today, we also saw The Republic of Panama introduce a bill on regulating cryptocurrencies, aiming to make the country “compatible with the blockchain, crypto assets and the Internet.” We have also seen support for making Bitcoin legal tender growing across Latin America in general, showing the world that it's possible to have a truly decentralized payment and financial system.

A sudden crash or drop in the cryptocurrency space may create emotional triggers to sell your digital assets. But that strategy in general isn’t a good idea in the long run. If you buy low, and sell lower, you will never accumulate wealth. 

Cabital recommends two different tested investment strategies to ensure that you grow your wealth over the long term: portfolio management and dollar cost averaging. As you can see, since Bitcoin and Ethereum were released, in the long term, their prices have steadily increased despite sometimes severe drops. Don’t let this flash crash in the digital assets market startle you. Just remain focused and keep investing every month as you do with other asset classes. 

This article has been prepared by Cabital Fintech (LT) UAB  (the “Company”) and is general background information about some of the Company’s activities at the date of this presentation.

This article does not contain all the information that is or may be material to you and should not be considered as advice or a recommendation to you in respect of the holding, purchasing or selling of digital assets and does not take into account your particular objectives, financial situation or needs. This article has been made to you solely for information purposes. This presentation may be amended and supplemented as the Company sees fit, may not be relied upon for the purpose of entering into any transaction and should not be construed as, nor be relied on in connection with, any offer or invitation to purchase or subscribe for, underwrite or otherwise acquire, hold or dispose of any digital assets, and shall not be regarded as a recommendation in relation to any such transaction whatsoever. The contents of this presentation should not be considered to be legal, tax, investment or other advice, and you  should consult with your own counsel and advisers as to all legal, tax, regulatory, financial and related matters concerning an investment in or a disposal of such digital assets and as to their suitability for you.

This presentation and its contents are proprietary to the Company, and no part of it or its subject matter may be reproduced, redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (excluding the relevant person’s professional advisers) or published in whole or in part for any purpose without the prior written consent of the Company.

This article contains forward‐looking statements. Such forward‐looking statements involve known and unknown risks, uncertainties and other important factors. Certain forward‐looking statements are based on assumptions or future events which may not prove to be accurate, and no reliance whatsoever should be placed on any forward-looking statements in this article.

The information in this article has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the presentation and the information contained herein and no reliance should be placed on it. Information in this article (including market data and statistical information) has been obtained from various sources (including third party sources) and the Company does not guarantee the accuracy or completeness of such information.

Raymond Hsu

CEO of Cabital

Raymond’s 10 years of experience holding leadership positions in fintech companies and banks inspired him to democratise digital currency financial solutions with Cabital.