An observation we've made in previous posts (e.g., AMC: Return Of The Meme Stock) was that the resurgence in meme stocks last spring came as Bitcoin sagged. That made sense, as the parabolic rally in Bitcoin and other cryptocurrencies earlier in the year had siphoned some of the speculative fervor out of meme stocks. So it may not have been entirely coincidental that AMC Entertainment Holdings, Inc. (NYSE:AMC) closed up nearly 9% on the same day Bitcoin (CRYPTO: BTC) dropped by double digits. But the proximate cause for the rally was most likely the news that weekend box office numbers for America's largest movie chain finally beat a pre-pandemic record.

So why did Bitcoin drop? The short answer is no one knows. Maybe the most likely reason is that crypto traders bought the rumor of El Salvador President Nayib Bukele's promise to make Bitcoin legal tender there, and sold the news of its implementation. Despite some hiccups with Bitcoin wallets in El Salvador, the implementation went smoothly enough that Bitcoin Magazine's Aaron van Wirdum was able to buy his McDonald's breakfast in San Salvador with Bitcoin. 

Before Bitcoin maximalists imagine the rest of the world following El Salvador's example, they ought to acknowledge that El Salvador has a dollarized economy now. Without its own currency, it has nothing to lose by accepting Bitcoin; in contrast countries with their own currencies would be giving up the seigniorage that comes with it. The other thing they ought to acknowledge is that, for better or worse, El Salvador is now the poster boy for Bitcoin, and the lofty claims made about it. For a small taste of those claims, see the pinned tweet by MicroStrategy, Inc. (NASDAQ:MSTR) Michael Saylor below.

For an acknowledgement that El Salvador is now a poster boy for Bitcoin, see Balaji Srinivasan's tweet below,

Or Joe Wiesenthal's,

The challenge for Bitcoin enthusiasts is that El Salvador is, well, El Salvador. Salvadoran immigrants have struggled in the U.S., as Jason DeParle noted in a dispiriting New York Times article ("Struggling to Rise in Suburbs Where Failing Means Fitting In"). One might hope El Salvador's embrace of Bitcoin will attract talented immigrants to El Salvador, but that hope should be tempered by knowledge that El Salvador has the highest homicide rate in the world.