El Salvador Buys the Bitcoin Dip Adding An Additional $25 Million Worth of BTC to Its Treasury
The world's largest cryptocurrency price slipped from $63,064 to $58,500, with a dip of 6.5% yesterday, on Wednesday, October 27, in the overall crypto market rout.
Acting quickly on this opportunity, El Salvador's government invested over $25.6 million at current prices and added 420 more bitcoins to its portfolio. Nayib Bukele wrote in a post, "It was along wait, but worth it. We just bought the dip! 420 new bitcoin." Exactly after an hour, he tweeted again, saying, "We're already making a profit off the #bitcoin we just bought." During those 60 minutes between the tweets, the value of the BTC grew by almost 0.4% or $100,000. Besides, he further explained on how El Salvador derives profits from their Bitcoin purchases.
Bukele wrote: “How do we make a profit if 1 BTC = 1 BTC? We have a trust fund accounted in USD, but the trust is funded by both USD and BTC. When the BTC part revalues in comparison to the accounting currency (USD), we are able to withdraw some USD and leave the trust with the same total”.
Currently, the Central American nation holds on to 1,120 Bitcoin, approximately $68 million worth of Bitcoin. Currently, the world’s cryptocurrency trades at just above $61023.90 per BTC.
Only last month, on September 7, El Salvador became the pioneer country to adopt bitcoin as legal tender alongside the U.S. dollar. The country first purchased 200 BTC on September 6 and later added 150 BTC the next day following a minor compression in Bitcoin. The president was quick to tweet a piece of advice saying, "They can never beat you if you buy the dips." Since then, the price of Bitcoin has plummeted after peaking a record high of $66,976 earlier this month.
El Salvador is striving to place itself as a global leader in cryptocurrency. It is also the third-largest holder of BTC ATMs, with the U.S. leading with 86.4% and Canada with 6.6% of all world's BTC ATMs.
President Bukele has debated that he will reduce the cost of remittances from Salvadoran migrants living outside the country. The country's economy is greatly clinging on almost $6 billion in remittances sent home each year or about a quarter of gross domestic product, with around one-fifth of households dependent on the cash infusions.