TL;DR
- Adopting BTC as a legal tender in the US would enhance its legitimacy and attract substantial investment, potentially boosting the price.
- This move could lead to market volatility with sharp movements due to speculative buying and unpredictable investor reactions.
What if the US Embrace BTC?
The United States will soon have a new President, with the elections scheduled for November this year. Those going to the ballot boxes will have to pick from the Democratic nominee – Kamala Harris, the Republican – Donald Trump, the Independent – Robert Kennedy, and others.
The battle promises to be quite contested, with the candidates centering their campaigns on popular topics such as financial stability, emigration, abortion rights, and others. Interestingly, Trump and Kennedy have also touched upon the cryptocurrency industry.
They both seem to be the preferred choice of pro-crypto voters, promising to let the sector thrive and create certain initiatives focused on Bitcoin. Not long ago, Kennedy said he would sign an executive order as a President to mandate the government to start purchasing BTC. For his part, Trump asserted that he will enforce laws that will see America holding on to all the BTC it currently possesses or accumulates.
But what if they (or any other future potential leaders of the US) decide to go further and make the primary cryptocurrency legal tender? ChatGPT claimed that such a move would have a huge impact on BTC’s price, and in the following lines, we will check why.
The AI-powered chatbot estimated that the legitimacy and recognition of the leading digital asset would be substantially boosted if America’s authorities made it a valid form of payment.
The initiative could attract a surge of investment from both retail and institutional investors, resulting in an influx of capital and a rallying price for BTC. ChatGPT also maintained that the move would translate into a clearer regulatory status for the asset.
Such breaking news could trigger a wave of speculative buying and fear of missing out (FOMO) among investors, further pushing the price upwards, the chatbot added.
On the other hand, it warned about a potential sell-the-news scenario and enhanced volatility:
“While the long-term trend might be upward, the immediate reaction could be highly volatile. Traders and investors might react quickly to the news, causing sharp price movements in both directions.”
The US Will Not be the First
Those who have followed the big news surrounding the crypto industry in the past few years must be aware that El Salvador became the first country to make BTC legal tender. This happened in September 2021 and was one of the main highlights of the bull run back then.
Since hopping on the bandwagon, the Central American country has witnessed several positive outcomes. For instance, the local tourism industry saw a surge of over 30% following the adoption of BTC. In 2021, around 1.2 people visited the nation, while in 2022 and 2023, that number increased to 2.5 million and 3.4 million, respectively.
The profile of people visiting El Salvador has also changed. Prior to the BTC adoption, the main flow of tourists was from the neighboring countries of Honduras, Guatemala, and Nicaragua, while after that, the majority of visitors became Americans.
Another reason boosting the tourism levels in El Salvador could be the improvements in safety enforced by the BTC-loving President Nayib Bukele. In the past few years, he has implemented stringent measures to combat gang violence and crime, resulting in a substantial decrease in homicides and overall violence.
The Central African Republic (CAR) made BTC a legal tender, too. However, several factors have so far hindered the success of the initiative. The country remains one of the poorest across the globe, with limited access to electricity, Internet, and mobile coverage: deficiencies that make it challenging to implement and utilize a digital currency effectively.
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