El Salvador Government Buys the Dip as Citizens Start Spending Bitcoin

September 09, 2021, 10:00 AM AEST - 2 weeks ago

On the day El Salvador legalised Bitcoin (BTC), the crypto and major altcoins were hit with a flash crash driven by a cascade of liquidations on the derivatives market. However, the incident didn’t deter the government’s stance on bitcoin. Rather, the market dip provided it an opportunity to accumulate more cheap coins.

In a tweet, the president of El Salvador, Nayib Bukele, revealed that the country bought an additional 150 BTC yesterday, worth over US$6.9 million at the time of writing. By accumulating more bitcoin in dip, the president said the government “saved a million in printed paper”:

El Salvador currently holds a total of 550 bitcoin in its reserve. The Central American republic is the first nation to officially recognise and adopt bitcoin as a legal tender, in addition to the US dollar. 

Critics Warn the Dip Could Become a Plunge

Some people criticised the country’s decision to acquire more bitcoins in the dip. “Be careful what you wish for. The dip may end up being a much larger plunge than you expect,” said economist and long-term gold proponent Peter Schiff. 

Meanwhile, its bitcoin exposure could also see the country become an equity-based society with one of the fastest-growing GDPs.

Bitcoin Adoption Spreads in El Salvador

By legalising Bitcoin, the Salvadorean government grants citizens the freedom to freely transact, send and receive payments in the digital currency. Already, some Salvadoreans and local businesses have started accepting bitcoin for payments, including McDonald’s. Bitcoin Magazine journalist Aaron van Wirdum confirmed this as on September 7, the day after the currency officially became legal tender, he requested to pay for his breakfast in bitcoin:

Following El Salvador’s example, Panama is also introducing a law to recognise and regulate the use of bitcoin and other cryptocurrencies in the country. More Central American nations are likely to follow suit.

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