Why El Salvador's Bitcoin Experiment Looks Brilliant Through a Forex Trader's Lens

Source: Dev.to

It’s 2:47 AM and I’m staring at my trading screen, watching BTC/USD tick up and down like a nervous heartbeat. My Twitter feed is exploding. “El Salvador buys the dip again!” says one tweet. “Bukele is bankrupting his country!” screams another. Everyone has an opinion about El Salvador’s Bitcoin experiment. The crypto maximalists call it visionary. The economists call it reckless. The IMF calls it concerning.

But here’s the thing: they’re all looking at it wrong.

I’m not just a smart‑contract developer and Python coder—I’m also a manual, chart‑staring, 3 AM price‑action forex trader. After spending enough time watching how currencies actually move, how central banks operate, and how sovereign nations play the money game, El Salvador’s move looks less like gambling and more like… genius.

The Part Nobody Talks About

Before El Salvador adopted Bitcoin, they used the US dollar—not pegged to it, not backed by it, but literally the official currency since 2001.

If you’re not a trader, you might think, “So what? The dollar is stable.”
What that actually means is that El Salvador had zero monetary policy. They couldn’t print money for liquidity, adjust interest rates, or devalue a currency to make exports competitive. Every monetary lever that countries use to navigate economic storms? Gone. They were passengers in someone else’s car, and the driver wasn’t even looking at them in the rear‑view mirror.

When the US Federal Reserve raises rates, El Salvador feels it. When the dollar strengthens and makes their exports more expensive, they can’t do anything. When they need stimulus, they must either borrow (at whatever rates international markets demand) or cut spending.

Crypto critics conveniently forget this when they mock Bukele for “gambling with Bitcoin.” They act like El Salvador was a pristine‑policy economy before Bitcoin. No—they were already playing with someone else’s house money.

What I See in the Charts

Every currency is a bet:

• Dollar – a bet on US economic policy, political stability, and reserve‑currency status.
• Euro – a bet on the European Central Bank holding together 19 economies with divergent interests.
• Yen – a bet on Japan’s demographic challenges not exploding.

So when people clutch their pearls about El Salvador “betting” on Bitcoin, ask: as opposed to what? Their previous bet on the US dollar was working great for them? A country with 20 % of GDP from remittances, hemorrhaging young people, and no control over its own economic destiny—was that the safe play?

In trader speak, Bukele diversified his portfolio. El Salvador didn’t dump the dollar; they kept it as legal tender alongside Bitcoin. It’s like a forex account that was 100 % long USD and then added a hedge. For the first time in two decades, the country has something resembling monetary optionality.

The Remittance Angle (Or: The Part Where It Actually Makes Sense)

El Salvador receives over $6 billion a year in remittances—more than its entire export economy. Before Bitcoin, Western Union and MoneyGram took roughly 10 % in fees. Sending $500 home meant $50 vanished into fees; the recipient got $450.

Across $6 billion, that’s $600 million a year lost to intermediaries. Bitcoin’s on‑chain and Lightning Network fees are typically 1–2 %, translating to $480–$540 million staying in Salvadoran pockets instead of corporate earnings.

When people talk about “blockchain use cases,” this is it: real people, real money, real impact—right now.

The Volatility Argument (And Why Traders Think About It Differently)

“But Bitcoin is too volatile! You can’t have a currency that swings 20 % in a week!”

Fair point—Bitcoin is volatile. But the Salvadoran economy was already volatile: commodity prices, tourism revenue, foreign investment, and remittances (tied to US immigration policy) all swing wildly.

The difference is visibility. Bitcoin’s price swings are on every chart, ticker, and news feed. When BTC drops 15 %, everyone sees it. When the Salvadoran economy contracts 8 % because of a US policy shift or a coffee price crash, it creeps in quietly through GDP reports.

From a trader’s perspective, Bitcoin’s volatility has a ceiling and floor you can analyze—supply, demand, adoption metrics, technical factors. The dollar’s value against Salvadoran purchasing power moves on Jerome Powell’s mood, US‑China relations, and other forces completely outside El Salvador’s control.

At least with Bitcoin, you can see the chart, make a decision, and have agency.

What This Really Is

Strip away ideology, laser eyes, and “have fun staying poor” nonsense, and you get:

• A non‑sovereign, globally liquid asset added to the monetary system.
• An asset that can’t be printed by any foreign central bank.
• Direct connection to global capital markets.
• More efficient remittance flows.

Is it risky? Sure. But what’s the “safe” option for a small Central American country with no monetary sovereignty, massive emigration, and an economy dependent on remittances and foreign aid? Through a forex trader’s lens, Bukele didn’t make a reckless bet—he diversified, hedged, and gave his country options.

The Uncomfortable Truth

If El Salvador succeeds, even partially, it exposes an awkward truth about the global monetary system: small nations might not have to choose between dollarization and hyperinflation. There could be a third option—one that powerful institutions have never highlighted.

That’s what I see in my charts at 2:47 AM. Not revolution. Not recklessness. Just a small country trying something different because the “safe” option wasn’t actually safe.

Whether it works or not? That’s the trade. And like any trade, we won’t know until we close the position. But I’ve seen worse bets in forex. A lot worse.

The views expressed in this article are my own.