El Salvador buys the dip as the Bitcoin price plummets to $42.9K.

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In a “buy the rumour, sell the fact” situation for Bitcoin, volatility returned to the cryptocurrency market. El Salvador seemed unconcerned, with President Nayib Bukele purchasing the dip.

Bitcoin (BTC) investors profited on Tuesday, as El Salvador became the first country to recognise the digital currency as legal cash, a milestone step that could have far-reaching repercussions for worldwide adoption.

After reaching local highs of more than $52,800 on Monday, the price of Bitcoin fell all the way to $42,900 in Tuesday trade.

Salvadoran President Nayib Bukele confirmed that his government bought the dip by snatching up 150 BTC during the depths of the selloff. As Cointelegraph reported, El Salvador made its first BTC purchase Tuesday on the eve of the Bitcoin Law coming into effect. The initial purchase of 200 BTC was valued at roughly $10.4 million.

Less than five minutes after the initial buy-the-dip tweet, Bukele said that the “discount is ending” for Bitcoin. He also thanked the International Monetary Fund, or IMF, for helping his country “save a million in printed paper” on his government’s Bitcoin purchase. For context, the IMF has come out against El Salvador’s Bitcoin foray. Its warnings about El Salvador’s initiative may have contributed to the recent bout of market volatility.

See also  Why Eric Rosengren, Reserve Bank of Boston President expects Bitcoin to come under pressure.

El Salvador now holds 550 BTC, worth roughly $28.8 million at current prices.

Volatility in the bitcoin market is nothing new. Between May and July, the total market capitalisation of all coins was slashed in half as a combination of technical trading, profit-taking, and fear-inducing news pulled Bitcoin from a peak of $65,000 all the way down to $29,000. Over the last month, the market has mounted an amazing recovery, with Bitcoin regaining $50,000, Ether (ETH) reaching $4,000, and the overall market worth rising back beyond $2.4 trillion.

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