ChatGPT looks at the effect on the price of Bitcoin if the US makes BTC legal tender

TL;DR

The adoption of BTC as legal tender in the US would improve its legitimacy and attract substantial investment, which could increase the price. Such a move could lead to market volatility with sharp movements due to speculative buying and unpredictable investor reactions.

What if the US accepts BTC?

The United States will soon have a new president, with elections scheduled for November of this year. Those who go to the polls will have to choose between the Democratic candidate: Kamala Harris, the Republican Donald Trump, the independent Robert Kennedy and others.

The battle promises to be hotly contested, with candidates focusing their campaigns on popular issues such as financial stability, immigration, abortion rights, among others. Interestingly, Trump and Kennedy have also talked about the cryptocurrency industry.

Both appear to be the preferred choice of pro-crypto voters, promising to let the sector thrive and create certain Bitcoin-focused initiatives. Not long ago, Kennedy said he would sign an executive order as president to order the government to start buying BTC. For his part, Trump stated that he will enforce laws that will allow the United States to keep all the BTC it currently owns or accumulates.

But what if they (or any other potential future US leaders) decide to go further and make the main cryptocurrency legal tender? ChatGPT claimed that this move would have a big impact on the price of BTC 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 increase substantially if US authorities made it a valid form of payment.

The initiative could attract increased investment from both retail and institutional investors, leading to an influx of capital and a price recovery for BTC. ChatGPT also maintained that the move would result in 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, driving the price even higher, the chatbot added.

On the other hand, he warned about a potential news selling scenario and higher volatility:

“While the long-term trend could be up, the immediate reaction could be very volatile. Traders and investors could react quickly to the news, causing sharp price moves in either direction.”

The US will not be the first

Those who have followed the big news surrounding the crypto industry in recent years should 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 moments of the bullfight at the time.

Since getting on the bandwagon, the Central American country has witnessed several positive results. For example, the local tourism industry saw an increase of more than 30% after the adoption of BTC. In 2021, around 1.2 people visited the nation, while in 2022 and 2023, this number increased to 2.5 million and 3.4 million, respectively.

The profile of people visiting El Salvador has also changed. Before the adoption of BTC, 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 for increased tourism levels in El Salvador could be the security improvements implemented by BTC-loving president Nayib Bukele. In recent years, he has implemented strict measures to combat gang violence and crime, resulting in a substantial decrease in homicides and overall violence.

The Central African Republic (CAR) also made BTC legal tender. However, several factors have hindered the initiative’s success so far. The country remains one of the poorest in the world, with limited access to electricity, internet and mobile coverage – deficiencies that make it difficult to implement and use a digital currency effectively.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!