Honduras indicates an intention to legalising Bitcoin
El Salvador, President Xiomara Castro believes, should not be the only nation to wean itself off the dollar.
Honduras might be the next nation to embrace Bitcoin as legal cash, upsetting the established order. Bitcoin-bull Max Keiser first raised the possibility of this occurring in a tweet last Friday. It stated “It’s happening..” and included a picture of the Honduran flag.
According to Bitcoin LightningNetwork+, Honduras’ President Xiomara Castro said that El Salvador cannot be the sole nation to overcome dollar hegemony.
“We cannot allow El Salvador to be the only nation that is free of dollar hegemony. Honduras has the right to seek membership in the First World.” Bitcoin is increasingly seen as a currency alternative to the dollar.
They assert that all fiat currencies will ultimately devalue to zero. As history demonstrates, massive debt and currency depreciation have only one outcome.
Recently, flaws in the dollar’s hegemony have grown more apparent. As unpleasant as it may seem, we may be watching the dollar’s demise in real time as businesses consider alternate currencies.
For instance, discussions between China and Saudi Arabia to trade oil in yuan have escalated as a result of American unhappiness with the Saudis’ security commitment. If successful, the approach would significantly undermine the dollar’s supremacy in the oil market.
Additionally, Russia is increasingly relying on the yuan as a means of evading sanctions related to the Ukraine crisis. According to reports, Russian businesses are hurrying to create yuan accounts in order to maintain cash flow.
However, James Fok, author of Financial Cold War: A View of Sino-US Relations from the Financial Markets, believes that despite apparent dollar flight, the yuan will not soon overtake the dollar. According to Fok, China’s capital restrictions and rule of law make the yuan unattractive against the dollar.
“However, this does not imply the renminbi will suddenly begin to compete with the dollar in any significant sense. To do this, a number of additional components must fall into place.”
Nevertheless, the rise of Bitcoin provides a viable alternative to both the yuan and the dollar. Additionally, because of its limited supply, it cannot be inflated to zero. Additionally, since it is apolitical, it appeals to those seeking to avoid factional strife.
How may the price respond if Honduras is let to proceed?
When El Salvador legalised Bitcoin on September 7, 2021, $BTC witnessed a 20% decline, bottoming at $42,800.
This precipitated a downtrend for the remainder of September, with the market falling to a local low of $39,500 until bulls broke the downtrend and rallied to a new all-time high of $69,000 six weeks later.
September 7 was largely anticipated to act as a trigger for a move upward, based on the concept of official acceptance of Bitcoin. Rather than that, the flash crash saw defies expectations. Ran Neuner, co-founder of Onchain Capital, claimed foul play by traditional institutions.
Thus, on the very day when El Salvador introduces Bitcoin as legal cash against the World Bank and IMF’s desires, every single major exchange inexplicably shuts down simultaneously with the price plummeting by 20%…
Nonetheless, based on a sample size of one, a government that declares Bitcoin legal tender would almost certainly plummet the price, at least temporarily. For the time being, all eyes are on Honduras.