Category: Stock Market

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Investing can add an extra zero (or two) to your net worth. It’s not a quick process, but it can be an easy one, even if you have no investing experience. Keep reading to find out how.

The doubling rule

The doubling rule is a simple formula that estimates how long it takes to double your money on an investment. To use the formula, divide 72 by your estimated growth rate. The answer is your doubling time in years.

You can use this formula for any appreciating asset — including your cash savings and government bonds. For those assets, you usually have a stated growth rate. Stocks, unfortunately, are less predictable. The good news is, if you plan on investing in stocks long-term, you can use the stock market’s historic average performance as your estimated growth rate.

The long-term caveat is important. The stock market goes up and down from year to year, so it’s mostly impossible to predict short-term growth rates accurately. But over 10 years or more, those ups and downs average out with greater consistency. Historically, the market’s long-term growth has been about 7% annually, net of inflation.

Back to the doubling rule: Money invested at 7% will double about every 10 years and three months.

From $10,000 to $100,000

Apply the doubling rule to a hypothetical stock market investment of $10,000, and your projected balances over time are:

• $20,000 after 10 years and three months
• $40,000 after 20 years and six months
• $80,000 after 30 years and nine months
• $160,000 after 41 years

By that timeline, you could turn your $10,000 investment into $100,000 in about 35 years.

What stocks to buy

Your actual investment growth rate will depend on what stocks you buy. Some can double your starting investment faster, while others — say, penny stocks — can zero out your wealth straight away. Faster growth is obviously the best outcome, but big gains always come with the potential for big losses.

That’s why it’s smart to take a moderate approach. You can do that with an S&P 500 exchange-traded fund (ETF). This is a fund type that holds 500 of the largest, most established companies in the U.S. These companies in aggregate are so influential that the S&P 500 index is often used as a benchmark for the overall stock market. The index also aligns with our targeted 7% growth rate.

There are many S&P 500 ETFs out there. For the best returns, choose one with a low expense ratio. You can find some S&P 500 funds that charge 0.03% or less for expenses.

From $10,000 to $1,000,000

What if you want to turn your $10,000 into $1 million instead of $100,000? Long-term investing can support that goal, too. To make that happen, you’d invest your initial $10,000. Then you’d add $550 monthly to that investment. Stay with that plan and you should pass the $100,000 mark in about 10 years. Keep going and you’re likely to reach millionaire status after 35 years.

You can also follow this plan with less than $550 monthly. Adding in a monthly investment of any size will dramatically expedite your results. The doubling rule isn’t sophisticated enough to project timelines for monthly investments, but you can use a compound interest calculator like this one.

Try it out to estimate the wealth potential of your investing budget over the next 10, 20, or 30 years.

Invest long-term for more predictable results

It takes a long-term commitment to build wealth in the stock market. Plan for a timeline of at least 10 years. Kick things off by investing in a diversified portfolio of established, successful companies — like an S&P 500 ETF. You can always branch out as you gain confidence picking investments, but you don’t have to.

Given enough time, your stock market investment can grow $10,000 into $100,000 or more. Start now so you can reach those wealth milestones sooner rather than later.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Investing in the stock market could turn your $10,000 into $100,000. Here’s how appeared first on The Motley Fool Australia.

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More reading

• Are AFIC shares outperforming the ASX 200 this year?
• These 6 ASX mining shares are now in the ASX 300
• Savings or dividends? What these 3 ASX bank shares are offering for income
• Bell Potter slaps buy rating on this profitable, dividend-paying ASX cannabis share
• Why did the Altium share price lag the ASX 200 today?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Six ASX mining shares were listed on the S&P/ASX 300 Index (ASX: XKO) today as part of S&P Global’s quarterly rebalancing.

This may surprise some investors as the S&P/ASX 200 Materials Index (ASX: XMJ), which tracks the mining sector, hasn’t exactly had a stellar performance year to date. In fact, it’s down 9.95%.

On an industry level, things aren’t too hot either with the S&P/ASX 300 Metals and Mining Index (ASX: XMM) also down 7.72% over the same period.

So these companies are outliers from the aggregate performance of their peers. They were included due to a surge in their share prices over the last quarter which, in turn, boosted their market capitalisations high enough to overtake laggards in the index.

This was helped by the relatively poor performance of shares in other sectors, such as information technology and consumer discretionary. These have been two of the worst hit on a year-to-date basis. It’s also helped companies from stronger sectors over the last quarter to take their positions in the index.

Let’s find out which miners are new to the ASX 300.

Which mining companies were added to the index?

They are:

• 5E Advanced Materials Inc (ASX: 5EA) is a mineral exploration company. Market capitalisation: $706 million
• Arafura Resources Ltd (ASX: ARU) is a rare earth exploration company. Market capitalisation: $586 million
• Grange Resources Ltd (ASX: GRR) is an iron ore mining and pellet production business. Market capitalisation: $862 million
• Argosy Minerals Ltd (ASX: AGY) is a mineral exploration company. Market capitalisation: $553 million
• Mincor Resources NL (ASX: MCR) is a high-grade nickel producer. Market capitalisation: $1.02 billion
• Neometals Ltd (ASX: NMT) is a producer of sustainable battery materials. Market capitalisation: $723 million

The post These 6 ASX mining shares are now in the ASX 300 appeared first on The Motley Fool Australia.

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• Guess which mining share is soaring 10% on ASX 300 inclusion news
• Grange Resources share price lifts on ASX 300 inclusion
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Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX bank shares can be considered rather unusual investments on the ASX. It’s no secret that many, perhaps even most, ASX investors hold at least one of the big four bank shares in their investment portfolios. Even if not, it’s almost certain that banks form a significant portion of any Australians’ superannuation fund.

But it’s also a reasonable assumption to make that most Australians have a bank account with one of the big four ASX banks as well. Thus, it can be argued that most Australians are getting two streams of income from an ASX bank, even if it’s not a big four bank like Commonwealth Bank of Australia (ASX: CBA).

One in the form of dividends from their investments (inside super or out). The other in the form of interest on their deposited savings.

We’ve recently examined the current dividend yields that ASX investors can expect out of the big four bank shares at present. So today, we’ll be checking out what kinds of income investors (and customers) of a few of the lesser ASX bank shares, as well as one big four banks, can expect.

AMP offers rates, but no dividends

The first of those is AMP Ltd (ASX: AMP). So let’s get this out of the way first — AMP does not currently pay out a dividend. The financial services company has done so in the past. But the company’s recent misfortunes have seen the dividend income dry up, at least for now.

But AMP does offer some interesting interest rates for its customers. At present, the bank currently has a potential interest rate of up to 2.6% per annum available for its AMP Saver product.

Saying that, depositors need to regularly deposit cash monthly to be awarded the higher rate, otherwise the base rate of 0.6% applies. But for investors willing to lock up their funds, AMPs rates for term deposits go as high as 4.4% per annum.

A non-big four ASX bank comes in strong

Turning to Bank of Queensland Ltd (ASX: BOQ), and we have an ASX bank share that does indeed pay a dividend. BOQ’s last two dividend payments were worth 22 cents per share each, fully franked. That gives BOQ shares a trailing yield of 6.29% at current pricing.

That’s going to be hard for Bank of Queensland’s own products to compete with. But in terms of rival products, BOQ’s Smart Saver Account is certainly competitive. It offers a maximum interest rate of 3.1% per annum.

But, again, to achieve this, customers need to make monthly deposits of at least $1,000. They also need to make at least five transactions with a linked Everyday account if they don’t want to instead get a base interest rate of just 0.05%.

BOQ’s term deposit interest rates go as high as 3.3%.

How does ANZ compare?

Let’s see how these offerings measure up to a big four ASX bank. So, time to check out Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ shares currently offer a dividend yield of 6.32%. That comes from ANZ’s last two dividend payments. These were worth 72 cents per share each, fully franked.

Again, that leaves ANZ’s depositor rates in the dust. The highest interest rate ANZ offers on a savings account is presently 1.65% with the ANZ Progress Saver. But customers need to make one deposit of at least $10 or more in the month, with no withdrawals. Otherwise, the base rate is 0.01%.

ANZ’s term deposits do go a little higher. The highest rate customers can expect to enjoy at present is 3% per annum.

So some real disparities here between BOQ, ANZ and AMP. Both in terms of dividends and interest rates. All customers and investors should read the fine print, though, and work out what product might be best for them. But this comparison does show that shopping around can well be worth it.

The post Savings or dividends? What these 3 ASX bank shares are offering for income appeared first on The Motley Fool Australia.

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More reading

• Why ASX bank shares are more likely to slowly grind lower than crash, despite famed Wall Street bear saying it’s time to short them
• Why is this top broker tipping 27% upside for the ANZ share price?
• Is this why the Macquarie share price was ‘steaming ahead’ on Friday?
• Here are the top 10 ASX 200 shares today
• Why did the ANZ share price go backwards in August?

Motley Fool contributor Sebastian Bowen has positions in Bank of Queensland. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Cronos Australia Ltd (ASX: CAU) share price was a strong performer on Monday.

The medicinal cannabis company’s shares ended the day 15% higher at 55 cents.

At one stage, the Cronos Australia share price even reached a record high of 58 cents.

Why did the Cronos Australia share price fire up?

Investors have been scrambling to buy the company’s shares over the last two trading sessions thanks to a bullish broker note out of Bell Potter.

According to the note, the broker has initiated coverage on the company with a buy rating and 60 cents price target.

Based on the current Cronos Australia share price, this implies further potential upside of 9.1% for investors.

What did the broker say?

Bell Potter likes the company due to its leadership position in medicinal cannabis distribution. It explained:

Cronos Australia is a medicinal cannabis company that is the market leader in distribution to pharmacies and provides patient consulting services through its clinic business. The key driver for the impressive growth in the past 24 months has been the CanView platform which provides the widest range of medicinal cannabis products compared to competitors (Anspec, Health House).

The current system provides access to patients, doctors and pharmacists. The transition to CanView 2.0 streamlines the consultation and prescription process.

In addition, the broker highlights that Cronos Australia is a profitable, dividend-paying cannabis share. The only one of its kind in Australia. Furthermore, it feels its valuation is fair and its growth outlook is strong. The broker concludes:

We initiate coverage on Cronos with a Buy recommendation. We expect the momentum observed in FY22 to continue into FY23 and translate into strong revenue and earnings growth. Cronos is currently the only profitable dividend paying medicinal cannabis company on the ASX and the valuation does not appear demanding relative to the expected growth.

The post Bell Potter slaps buy rating on this profitable, dividend-paying ASX cannabis share appeared first on The Motley Fool Australia.

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• Guess which company just became the first ASX cannabis share to pay a dividend
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Altium Limited (ASX: ALU) share price had a relatively poor day of trade on Monday.

The electronic design software company’s shares ended the session almost 1% lower at $35.25.

Why did the Altium share price drop on Monday?

There were a couple of catalysts for the weakness in the Altium share price on Monday.

The first was broad weakness in the tech sector following a disappointing end to last week on Wall Street’s NASDAQ index.

The tech-focused index ended with a 1.3% decline amid rate hike concerns and current futures contracts are pointing to only a very modest recovery on Monday night.

As a result, the S&P/ASX All Technology Index fell 0.8% this afternoon, compared to a 0.35% gain by the benchmark ASX 200 index.

What else was dragging on its shares?

Also dragging on the Altium share price was the fact that it was trading ex-dividend this morning.

Last month, the company released its full year results and revealed strong revenue and profit growth for FY 2022.

This allowed the Altium board to declare a fully franked final dividend of 26 cents per share, bringing its full year dividend to 47 cents per share. This was an increase of 18% year over year.

This morning, its shares went ex-dividend, which means that the rights to this final dividend stay with the seller and don’t transfer to the buyer of shares between now and the payment date. In light of this, its shares have fallen to reflect this.

Eligible shareholders won’t have long to wait until they receive this dividend payment. Altium is planning to pay shareholders before the end of the month on 27 September.

The post Why did the Altium share price lad the ASX 200 today? appeared first on The Motley Fool Australia.

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Shares in Incannex Healthcare Ltd (ASX: IHL) roared higher to close the market on Monday.

Incannex shares closed the day up 13.04% to 26 cents apiece.

In comparison, the All Ordinaries (ASX: XAO) finished the day up 0.26%.

Why are Incannex shares smoking out the ASX?

Investors bid up Incannex shares on Monday, despite the medicinal cannabis company not releasing any announcements to the market. However, the S&P Dow Jones Indices updated its quarterly rebalance late on Friday.

As a result, a number of shares were on the move today following their addition or removal from the S&P/ASX Indices.

Incannex shares will be added to the S&P/ASX 300 Index effective prior to the open of trading on 19 September.

The inclusion to the ASX 300 Index provides a much-welcomed boost for the company’s shares.

This is because fund managers must abide by their investing mandate which permits them to only buy shares included in specific indices.

Each index comprises a number of companies that have the largest market capitalisation of that group.

Incannex share price summary

In March 2022, the Incannex share price rocketed to a multi-year high of 75.5 cents before treading downhill.

Fast-forward to August, and its shares hit a 52-week low of 18.5 cents.

This means that when looking at year to date, Incannex shares are down 58.4%.

Based on today’s price, Incannex is worth approximately $350.42 million and has 1.52 billion shares outstanding.

The post Why the Incannex share price leapt 13% on Monday? appeared first on The Motley Fool Australia.

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• Up 35% in a month, is the Incannex share price on the comeback trail?
• Can ASX cannabis shares ever fully recover?
• Why is the Incannex share price spiking 8% on Tuesday?
• ‘World’s largest portfolio’: Why this ASX cannabis share is up 36% in August

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Materials Index (ASX: XMJ) closed 1.94% higher today, but one ASX iron ore share left it in the shade.

The Flinders Mines Ltd (ASX: FMS) share price soared 41.51% today to close at 75 cents.

Let’s take a look at why this ASX iron ore share had such a good day.

Iron ore development news

Investors bought up Flinders Mines shares after the company advised a farm-in agreement with BBIG Group Pty Ltd had been terminated.

This will enable Flinders to negotiate a staged development of its Pilbara Iron Ore Project in Western Australia.

Stage one will involve a lower volume, near-term trucking operation to “take advantage of iron ore prices” and provide cash flow.

Flinders will also keep looking into stage two, a higher volume operation involving the use of rail, road, and port.

Commenting on the news, Flinders chair Cheryl Edwardes said:

The FIA termination provides Flinders with a more certain pathway to near term cashflow as we attempt to capitalise on current iron ore prices and pursue a less capital intensive, nearer-term mining and logistics solution.

Flinders said there will be one final shortfall payment of about $10 million.

Share price snapshot

The Flinders Mines share price has fallen around 15% in the past year. However, year to date, it has surged 32%. The company’s shares have gained 50% in the last month alone.

For perspective, the S&P/ASX 200 Materials Index has fallen 7% in the past year.

Flinders Mines has a current market capitalisation of nearly $127 million.

The post Guess which ASX iron ore share rocketed 40% on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) edged higher on Monday following last week’s horror 3.88% tumble. The index closed today’s trade 0.34% higher at 6,852.20 points.

The S&P/ASX 200 Energy Index (ASX: XEJ) provided a major boost to the market, lifting 4%.

Coal miners led amid news Russia has pushed back the reopening of Nord Stream 1 – a major gas pipeline to Europe, as ABC News reported. That could cause gas prices and demand for coal to surge in the continent.

Oil prices also lifted on Friday, with the Brent crude oil price gaining 0.7% to US$93.02 a barrel and the US Nymex crude oil price lifting 0.3% to US$86.87 a barrel.

The S&P/ASX 200 Materials Index (ASX: XMJ) also rose 1.9% today. The gain came after iron ore futures slipped 1.1% to US$95.34 on Friday while gold futures lifted 0.8% to US$1,722.60 an ounce.

All in all, four of the ASX 200’s 11 sectors traded higher today. But which share outperformed all others? Keep reading to find out.

Top 10 ASX 200 shares countdown

Monday’s top performing ASX 200 share was coal producer Coronado Global Resources Inc (ASX: CRN). The stock lifted 7.45% to close the session at $1.73.

Find out more about the company and what it’s been up to here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
Coronado Global Resources Inc (ASX: CRN)	$1.73	7.45%
Whitehaven Coal Ltd (ASX: WHC)	$8.49	6.52%
Paladin Energy Ltd (ASX: PDN)	$0.835	6.37%
Core Lithium Ltd (ASX: CXO)	$1.36	5.84%
New Hope Corporation Limited (ASX: NHC)	$5.39	5.69%
Beach Energy Ltd (ASX: BPT)	$1.725	5.18%
Woodside Energy Group Ltd (ASX: WDS)	$35.08	4.25%
Pilbara Minerals Ltd (ASX: PLS)	$3.70	4.23%
Evolution Mining Ltd (ASX: EVN)	$2.25	4.17%
West African Resources Ltd (ASX: WAF)	$1.205	3.88%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords shares smashing new highs on Monday
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• Leading brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the Core Lithium share price cruising 5% higher today?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Life360 Inc (ASX: 360) share price slid further into the red on Monday.

At market close, shares in the family safety tech company are 4.87% lower to $4.88. With no company announcements out today, it’s fair to say the disappointing move was likely tied to Life360’s planned removal from the S&P/ASX 200 Index (ASX: XJO) in the upcoming September quarterly rebalance.

The decision to oust Life360 from the benchmark follows a painful 49% fall since the beginning of the year. Unfortunately for shareholders, a 40% underperformance of the Aussie index was terrible enough to receive the boot.

However, could the Life360 share price now represent value?

A diamond in the rough

There’s no sugarcoating it — Life360 is not profitable… and by a fair margin at that. According to its recent half-year report, the company made a $58.2 million net loss on the bottom line.

That is not a result investors like to see. Especially in an environment where capital costs are increasing due to interest rates. Although, one fund manager is willing to forgive Life360’s lack of fruitful profits, thanks to its potential to be a market leader.

Discovery Funds portfolio manager Chris Bainbridge named Life360 as one company the fund was keen on. Furthermore, Bainbridge discussed his belief that the unravelling of valuations across ASX-listed tech shares was a net positive, stating:

We believe this correction is one of the best things that could have happened for a number of tech companies because it enforces a financial discipline that hasn’t been there for the last few years. There are now depressed valuations for companies with demonstrably better earnings than anyone was projecting six months ago, and that’s something the market is missing.

In terms of profitability, Life360 is forecast to become earnings before interest, tax, depreciation, and amortisation (EBITDA) positive toward the end of 2023. Though, it is Bainbridge’s belief in Life360’s potentially market-leading position that has excited.

How the Life360 share price compares

The unprofitable nature of the company means we can’t use a traditional price-to-earnings (P/E) ratio for peer comparisons. In its place, let’s take a look at how the Life360 share price stacks up using the price-to-sales (P/S) ratio.

At a P/S ratio of around 4 times, Life360 is roughly on par with other ASX-listed software companies. For example, Hansen Technologies Limited (ASX: HSN) trades at 3.2 times. Whereas, Nitro Software Ltd (ASX: NTO) is fetching 4.5 times.

The post Down 49% so far this year, has the Life360 share price been massively oversold? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hansen Technologies and Life360, Inc. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Bitcoin (CRYPTO: BTC) and El Salvador made global headlines in June 2021, when the Central American nation announced it would make the crypto legal tender.

It became the first country in the world to do so.

(The Central African Republic followed suit in May this year, becoming the second nation to adopt BTC as a nationally recognised currency.)

The Bitcoin adoption became official on 7 September last year. At the time, El Salvador’s flamboyant president Nayib Bukele pronounced the token would change his nation for the better.

And for the first few months, the Bitcoin price kept climbing, trading at all-time highs of US$68,790 on 10 November.

But you’re likely aware of the crash that’s happened since. BTC is currently trading for US$19,864, down 71% from its highs.

Is El Salvador’s Bitcoin adoption fizzling?

The big price falls over the past 10 months certainly have not spurred Salvadorans into rushing to embrace the crypto instead of US dollars, which remain the favoured currency.

As to the future of the nation’s great crypto experiment, that depends on who you ask.

El Salvador’s former central bank chief Carlos Acevedo is decidedly on the fizzling side.

According to Acevedo (courtesy of Bloomberg):

No one really talks about Bitcoin here anymore. It’s kind of been forgotten. I don’t know if you’d call that a failure, but it certainly hasn’t been a success… In El Salvador we have a good payments network, so why transfer money with cryptocurrency?

Only around 2% of remittances have been sent from crypto wallets, according to the central bank.

An opinion poll conducted by the Universidad Centroamericana also found less than stellar support for Bitcoin in day-to-day use.

“If you go to any market in El Salvador, you’re more likely to receive an insult than be able to purchase something in Bitcoin. It’s not a part of people’s daily routine,” director of the university’s public opinion institute Laura Andrade said.

Atop the less than hoped for adoption rates, the government’s adoption of Bitcoin as legal tender has also seen the International Monetary Fund delay approval of a US$1.3 billion program.

Chief operating officer of Torino Capital Fabiano Borsato said (quoted by Bloomberg):

The Bitcoin experiment promoted by the Bukele administration has significantly raised the market’s risk perception of the country. It’s being implemented in a context of fragile public finances, high and persistent fiscal deficits and doubts about the rule of law in the country.

This, in our opinion, will prevent El Salvador from accessing financing in the international markets under favourable conditions in the short and medium term.

Or is BTC adoption just getting off the ground?

Not everyone agrees that the great crypto experiment is a flop.

El Salvador’s digital wallet, Chivo, has more than four million users, according to finance minister Alejandro Zelaya. And he says it’s promoting a rapid rebound in tourism and drawing in international blockchain companies.

And the government still intends to issue its Bitcoin-backed bond, the so-called ‘volcano token’.

Chief technology officer at Bitfinex Paolo Ardoino is also among the proponents of El Salvador’s crypto embrace.

“Assuming cars were a failure because after the very first year Ford started production in 1896 no more than 2% of the population had a car would’ve been quite myopic,” he said.

Ardoino added, “The government has a long-term vision. The crypto industry is highly technological and that is the type of industry that everyone should want in its country.”

And founder of Bank to the Future Simon Dixon disagrees that adoption levels are low after visiting the nation last month.

According to Dixon (quoted by Bloomberg):

I don’t see adoption as low. I see a country where everybody has a Bitcoin wallet, and everybody knows what Bitcoin is. This is the first time I’ve ever met a government that has a president who has assembled a team that really operates with the urgency and impact of a fast-growing company.

Fizzling or just taking off?

Time will tell.

The post Is El Salvador’s great Bitcoin experiment fizzling or just getting started? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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