El Salvador buys the dip after the cryptocurrency crash

The Bitcoin price dropped to below $ 30,000 this week. Because of this decline, El Salvador saw the opportunity to buy the decline. The country’s president has no paper hands and in addition to this purchase shows the new plan for Bitcoin City – a city at the foot of a volcano devoted exclusively to bitcoin.

El Salvador, the South American country known as the first Bitcoin nation, recently said it is benefiting from this drop in the Bitcoin price. Specifically, he announced that he was acquiring 500 BTC at an average price of $ 30,744 per coin, for a total value of about $ 15.4 million. That brings the country’s total purchases to about 2,000 bitcoins.

El Salvador chooses DCA

The entire cryptocurrency market looked red this week, with all tokens falling more than 10%. The market continues to decline following the Federal Reserve’s policy announcement last week. In addition, Bitcoin has been approved as a legal tender in the Latin American country, a step that the International Monetary Fund (IMF) and other international organizations have advised against.

Efforts to curb rising inflation in El Salvador began in September 2021 with the adoption of BTC as the legal tender. When the king’s currency became legal tender in the country, it acquired a significant share of the most valuable cryptocurrency asset. When it comes to acquiring Bitcoin, El Salvador takes a “buy the dip” approach. When the price of bitcoin falls, the president declares that additional bitcoin will be added to the country’s reserve currency fund.

Since El Salvador adopted BTC as a legal tender, it is the cheapest purchase in the country to date. Bukele believes that “some guys are selling really cheap”, which supports his long-term goal of widespread Bitcoin adoption in light of current market sales.

El Salvador is fully committed to Bitcoin

The country’s decision to introduce BTC as its official currency is not the only decision the country has taken to boost the country’s economy. President Bukele has previously indicated that his goal is to make El Salvador the most Bitcoin-friendly nation.

It was also recently announced that the country is preparing to launch its long-awaited Bitcoin Volcanic Bonds. The money generated from the bonds would be used to build the world’s first Bitcoin city. However, the bond release date has already been postponed several times.

El Salvador does not (yet) accept Bitcoin

It is also unfortunate for the president that the people of El Salvador do not like switching to Bitcoin and using the Chivo wallet. A few weeks ago came the news that 60% of the country’s residents had given up the Chivo wallet after receiving the free $ 30 when they signed up.

In addition, companies operating in El Salvador are in no hurry to accept Bitcoin, with only 20% of all companies currently offering Bitcoin payments. Apparently, there are even companies that once accepted BTC, which have now stopped doing so and have gone back to basics.

Even when it comes to taxes, there is still no storm. Only 5% of all El Salvador residents have chosen to pay their taxes using the Chivo wallet.

The low adoption rate is most likely related to the volatile nature of Bitcoin, combined with the technical complexity of using the Chivo Wallet. Older people in particular have difficulty using.

Bitcoin City

The president posted some pictures of Bitcoin City on Instagram. It becomes a city built right next to a volcano. The goal is to run it solely on bitcoin and get the energy mostly from the volcano.

Before we show these pictures, let’s take a look at the plans that were shared on November 21st. In it we see the shape of the city and the facilities that Bitcoin City will contain.

Bukele estimated that the entire project would cost around 300,000 bitcoins. With bitcoin’s exchange rate at the time – a few days after the previous all-time high – it was sloppy 15.3 billion. At present, this price is around 9 billion euros.

This is despite the lower price still a high amount. To fund this, bitcoin bonds will be issued, the profits of which will go to this project. Half of this sum is used for mining infrastructure and the other half to buy and store bitcoins. For those interested; these bonds are expected in september.

What do the plans look like?

In the photo that Bukele shared, we see a model of the city. It’s a kind of circle with a big bitcoin square in the middle. Despite bitcoin price declines, he likes to share this. “Bitcoin City is beautiful. And so is the airport,” the president wrote on his Instagram page.

It is therefore also possible to fly to Bitcoin City. The official end date has not yet been announced. In the pictures of the message, we see, among other things, a kind of stadium and other buildings that will cover the city.

President Bukele shows up on Twitter

For example, El Salvador recently replenished its Bitcoin reserves by buying 500 BTC at a price of around $ 30,000. This purchase has already given the country the opportunity to make money, and the country’s president did not hesitate to post it on his Twitter account.

According to the Twitter post, the country’s balance rose to $ 1 million in just 11 hours, right after Bitcoins were purchased. While President Bukele boasts of the success of the deal, Twitter users reported that the country lost $ 20 million due to an average purchase price of about $ 45,000. Bukele said on Twitter:

“I could sell those coins right now and make almost a million dollars in just 11 hours, but of course not.”

Because the average Bitcoin purchase price is high, El Salvador only enters the green numbers when the price of the largest cryptocurrency has risen by about 40%. In September, the country began buying Bitcoin when BTC traded for around $ 50,000.

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