Bitcoin traded higher on Wednesday, reversing steep losses incurred over the past two weeks after the 39-year-old president of El Salvador said his country has passed a law adopting the world’s biggest digital currency as legal tender.
Bitcoin was up nearly 8% at $35,142 after El Salvador President Nayib Bukele said the nation officially adopted Bitcoin as legal tender, a step he believes will create jobs and promote financial inclusion.
TheStreet founder Jim Cramer continues to see Bitcoin as a viable hedge against inflation, telling the Action Alerts PLUS investing club on Monday that Bitcoin and other cryptocurrencies may be the best hedge offset to the Federal Reserve’s money printing.
Bukele, Latin America’s youngest president who’s known to break from the norms, said on Twitter that lawmakers approved the legislation by a “supermajority.”
Bukele previously has said that Bitcoin could boost the economy, help counter El Salvador’s low banking penetration rate and facilitate faster transfers for $6 billion of remittances a year.
The move to make the virtual coin legal tender is a rare slice of good news for the largest cryptocurrency, which is struggling to recover from a May rout. Bitcoin slumped to a two-week low Tuesday after the surprise recovery of Colonial Pipeline’s cyberattack ransom raised concerns about Bitcoin's supposed gold-like infallibility.
Real Money contributor Doug Kass is on the other side of the proverbial digital coin, standing solidly in the camp that digital currencies aren't based on fundamentals that support either a viable method of payment or store of value.
“I believe cryptocurrency is like Tinkerbell's light -- its power source is based solidly on enough children believing in it," Kass wrote in his Real Money column Tuesday.
Like wrestling icon "Rowdy" Roddy Piper, "I have come here to chew bubble gum and kick ass ... and I am all out of bubble gum."
Added Kass: “Despite protestations from some very intelligent digital currency observers, I remain a Bitcoin bear.” Read and profit from more of his investing insights on Real Money.