Big things were promised when El Salvador adopted Bitcoin as legal tender last year — including a vast new source of wealth for business owners and the possibility of the country paying off billions of dollars of foreign debt.
The reality has been more mixed, with plans for a Bitcoin bond offering getting pushed back, and many merchants discovering their newfound wealth could be swiftly erased thanks to the cryptocurrency’s volatility. But the story hasn’t been all bad.
Even as Bitcoin suffered a crash over the past year, going from a high of more than $60,000 to a nadir of about $35,000 in June 2021, some crypto-savvy entrepreneurs figured out how to ride the waves. (The price of Bitcoin is now hovering around $40,000.)
We talked to some local business owners to learn how they managed to say one step ahead of the wild swings, and end up better off.
Manuela Velasquez, clothing and beauty item importer
Like many business owners in El Salvador, she started accepting payments in Bitcoin after the adoption of the currency as legal tender in September 2021. But early on, she wanted to investigate how crypto markets operate to get a sense of what she was dealing with. She consulted with other entrepreneurs who had more experience with digital assets.
“One of the first things I noticed is that it is a volatile asset, with value changing too quickly,” she told us. “I spent hours on the computer watching videos and reading specialized articles to understand it” along with consulting with friends. “That helped me to face the Bitcoin price crisis” over the past several months.
Velasquez says she also checks crypto investment websites and mobile apps “daily” to keep an eye on where the price is headed.
“When I saw the price begin to fall in early November, I decided that I would not treat Bitcoin payments as direct capital of the company, but as an investment in the future,” she said. And she made other strategic changes, including by shifting…
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