El Salvador Buys 500 Bitcoin As Markets Fail to Strongly Recover

man pulling out a bitcoin from his pocket

El Salvador has used this market opportunity with Bitcoin falling below $30,000 to buy more BTC. According to the President of El Salvador Nayib Bukele, the country bought 500 BTC at an average price of $30,744. In this way, the country is the first one in the world to have publicly purchased more than 2,300 BTC. 

El Salvador Adds More Bitcoin to Its Reserves

El Salvador continues to expand its BTC reserves after purchasing 500 BTC on May 9. According to Nayib Bukele, the President of El Salvador, the country holds now more than 2,300 BTC. This represents 0,0109% of all BTC in existence, which gives El Salvador an advantage over other countries that are still not interested in holding or purchasing Bitcoin. 

Let’s not forget that El Salvador became the first country in the world to have purchased Bitcoin in September 2021. At that time, Bitcoin was in a bull market that reached an all-time high close to $69,000 per coin. Due to this reason, a large number of international financial organizations have been pressuring El Salvador to avoid purchasing Bitcoin. 

It is also worth pointing out that El Salvador does not have its own fiat currency. The country adopted the U.S. dollar as legal tender and it has now decided to move towards a Bitcoin standard. 

The situation in the cryptocurrency market has given a great opportunity for El Salvador to follow a DCA (dollar-cost averaging) strategy. Bitcoin and the whole cryptocurrency market have moved lower due to different reasons. One of these reasons is related to the fact that the Terra (LUNA) ecosystem has imploded. 

The UST stablecoin has lost its peg and fallen below $0.10 per coin. This has pushed LUNA to literally zero. The coin is now being traded below $0.0002 per coin after being traded above $110. This shows how the virtual currency lost more than 99% of its value in just a matter of days. 

This situation in the Terra ecosystem has pushed Bitcoin to the lowest price in more than a year, falling to almost $26,000 per coin. In some exchanges, the digital currency has fallen even lower. Basically, every single virtual currency has fallen last week. Hence, the crypto market experienced a massive sell-off that allowed El Salvador to add more BTC to its reserves. 

Now, Bitcoin seems to have stabilized between $29,500 and $30,500. However, volatility remains. It would be very important to see what could happen with digital currencies in the coming days, considering that Ethereum (ETH), Solana (SOL) and XRP have also been affected by this situation in the cryptocurrency market. Another thing to consider is related to Bitcoin’s dominance in the market. According to CoinMarketCap, Bitcoin’s dominance has reached its highest point at over 44% since October 2021.

Jonathan Gibson

Jonathan Gibson