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El Salvador bets on bitcoin again

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Yesterday the president of El Salvador announced new bitcoin purchases.

He said they followed the “buy the dip” logic, meaning buying when the price drops.

El Salvador Bitcoin
President Bukele

Investors’ “by the dip” and Bitcoin fluctuations

Yesterday’s purchase was 150 BTC, with an investment of allegedly around six and a half million dollars, so in total the country now owns 700 BTC (around 29.5 million dollars at the current price).

Bitcoin’s price dropped yesterday, and it continued to drop overnight.

Until a few days ago the price was around $ 47,000, but yesterday it dropped below $ 44,000, and today, after a short hike to $ 40,000, it seems to have settled between $ 42,000 and $ 43,000 for now.

Earlier this month, it had risen above $ 50,000.

The concept of “buy the dip”, now very popular among bitcoiners, is to take advantage when prices fall to buy bitcoins in order to increase your BTC accumulation.

Many bitcoiners do not buy BTC to resell them as quickly as possible at a higher price, but simply to accumulate them as a long-term store of value. They often believe that by doing so, the value of BTCs can increase.

Evidently the president of El Salvador also thinks so, so much so that in a subsequent tweet he wrote that with the buy the dip “they can never beat you”.

A very successful hypothesis among bitcoiners is that the price of BTC can reach and exceed $ 100,000 by the end of the year, and this makes it clear why they are willing to buy bitcoins right now when the price goes down.

Bukele’s bet

President Bukele also announced that the country’s official Bitcoin wallet, Chivo, has already been downloaded about 1.6 million times., and given that in total the inhabitants of El Salvador are about 6.5 million, including children and the elderly, this is in all respects a great success, as it has only been launched 15 days ago.

The bet of El Salvador therefore is not only that BTC is used by its citizens as a currency or as a store of value, but also that the state itself can benefit from it in the event that the value of bitcoin in the coming months can increase significantly.

This scenario today is only theoretical, possible but not necessarily probable, and it is for this reason that the purchase of 700 BTC by a state, or with public money, must be considered a bet, also because for a country with a total public debt of 18,000 million dollars it appears difficult to justify a risky public investment of several tens of millions.

But if Bukele is right, then his bet will have really turned out winning.


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