By Jurica Dujmovic
In May 2021, Nilus Mattive traveled to El Salvador to watch his daughter compete at the World Junior Surfing Championship. While he was there, he took the opportunity to learn more about the country’s bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.12% experiment.
President Nayib Bukele ushered through a bill that made bitcoin legal tender 13 months ago, the first country in the world to do so. The cryptocurrency has crashed by more than 50% since then.
Today, Mattive, an author and investor, shares his insights on cryptocurrencies, El Salvador and the financial industry’s adoption of crypto.
MarketWatch: Tell us about your experience in the investment industry.
Nilus: I’ve been an investment analyst and financial writer for almost 25 years now. That means I’ve seen an awful lot of different trends come and go, and I’ve experienced a lot of different market environments as well.
MarketWatch: How did you get introduced to crypto?
Nilus: I knew about bitcoin very early on from other friends and colleagues in the investment world, and I loved the philosophy behind it. But I didn’t think it would ever gain mainstream appeal, so I largely ignored it — and the rapidly evolving crypto space — for a very long time.
My expertise was always conservative strategies — dividend stocks, other income investments, selling options and things like that.
Then, a few years ago, I started working with Teeka Tiwari and his widely recognized team of crypto analysts. That experience really challenged me to finally dig deeper and understand what was happening on a much deeper level.
MarketWatch: What’s your take on crypto and bitcoin as a store of value, and what were your thoughts when you first heard that El Salvador’s president decided to dive head-first into world’s first bitcoin experiment?
Nilus: I’ve always had a very practical viewpoint — people collectively determine the value of anything. This is why we’ve used everything from seashells to pieces of paper to easily exchange goods and services.
Bitcoin is no different. If a growing number of people recognize it as a store of value — and this is what we have been seeing with rising adoption rates — then bitcoin is becoming a store of value.
Obviously, we’re still in the relatively early stage — roughly 10% to 15% of Americans having had some dealings with crypto … and a global percentage is much lower.
But what we’ve seen very consistently is that once a major innovation gets into that 10% to 15% adoption range, the rate rapidly increases until you hit a point of 85% adoption or more. This has been true of everything from washing machines and microwaves to the internet. And if anything, newer technologies have been adopted more quickly.
In other words, we could be just on the cusp of a major boom in bitcoin adoption.
So, could the whole crypto space still end up imploding? Yes.
But it is far more likely that bitcoin is here to stay and will only get more valuable because of an inherently limited supply.
This is also why I wasn’t surprised to hear that a country like El Salvador was going to diversify its balance sheet into some bitcoin.
Bukele is making a calculated bet on everything I’ve just outlined.
It’s really not that much different than putting some of a country’s reserves into gold or some other asset. And it makes even more sense for El Salvador because the country was already tied to the U.S. dollar and so many Salvadorans work here and send money to family back home.
MarketWatch: How did you end up in El Salvador?
Nilus: The country has excellent waves, and I had actually taken my family there for surfing vacations twice before, in 2016 and 2018.
This time — at the end of May — my daughter was going with the U.S. Surf Team to represent our country at the International Surfing Association’s World Juniors, which is the equivalent to the Junior Olympics.
My wife and I obviously wanted to go watch that take place. But I also knew it would be the perfect opportunity to look into the country’s bitcoin experiment right there on the ground, especially since El Zonte — aka “Bitcoin Beach” — was just one town over from where the event was being held.
In fact, it’s interesting because Bukule has really prioritized crypto adoption and surfing tourism as two of his major governmental initiatives and they sort of collide right there in that area.