In 2021, El Salvador was the first region to make a privately mined digital currency its legal tender. Bitcoin alongside USD are the two national currencies of this country now. Platforms provide features like a free demo account, 24*7 customer care, and précised trading calls. The country faced many issues regarding inflation when the USD was the mere national currency of this El Salvador. According to reports, Nayib Bukele wanted bitcoin to transform into a legitimate monetary aspect. There are also some concerns among the crypto enthusiasts, which is better, bitcoin or precious metals like gold and there are articles available online that help answers this question.
El Salvador tends to have more bitcoin than its overall gold reserve. El Salvador has made several bold moves by buying almost every bitcoin dip recently, and they even faced exceeding criticism from some influential financial organizations. Here are reasons why El Salvador keeps purchasing bitcoin dip.
El Salvador’s Bold move!
Central banks have been seeking different options to command inflation. Central banks do not want their currency value to decrease as it also decreases their country’s financial power. If a central bank decides to devalue its currency by 5%, it will lead the purchasing power of its people to decrease by the same percentage that is 5%.
However, this is only possible when the world is facing an economic recession which central banks can easily control if they know how to manage digital currencies. El Salvador does not have any problems when it comes to digital currency management tools. It has been using digital currency for the last three years and has managed to keep its currency stable throughout this period.
El Salvador’s bitcoin city!
Bukele is bullish on bitcoin and wants everyone to become part of this digital currency revolution. Bukele wanted the whole country to buy bitcoin dip at last week’s all-time high (ATH), and he publicly stated that buying bitcoin is more economical than buying USD.
Bukele also said that El Salvador Central bank was right when it purchased a significant amount of bitcoins at $1,000 and kept it in its digital wallet for the last three years. So they can sell those now while they will be at $20,000.
El Salvador Recent Bitcoin Buys!
El Salvador has made several excellent decisions regarding bitcoin. But, unfortunately, the world realized the significance of this bold decision last year when it faced an economic recession.
In 2019, El Salvador bought a lot of bitcoins at the dip, and their value dropped by 40% recently. It purchased 2 million USD worth of bitcoins at a $4,000 price range and is now at $2,000 per bitcoin.
El Salvador also received criticism for its surprising move of buying every sell-off that occurred in recent times during the crypto bear run for almost a year.
Will any other country accept BTC as a legitimate monetary aspect?
In the past, Russia, Pakistan, and Belarus were the only countries that had banned bitcoin. However, in recent months, many countries have announced to ban on bitcoin by making amendments to their country’s laws.
According to reports, European Union has announced plans to make amendments to its laws which will allow European Union member states to block cryptocurrency trading platforms.
Some individuals have argued that El Salvador’s decision to acquire Bitcoin represents their belief that the cryptocurrency is here to stay. In contrast, others state that they are simply preparing against future market uncertainty.
It is not the first time the country has purchased Bitcoin reserves. Earlier in 2018, they made a significant purchase of $400 million worth of Bitcoin at a $6,000 price range based on their previous observation that every time there is a downward spiral in bitcoin price and value, it eventually bounces back in a short period.
El Salvador also stated that this move keeping in mind the benefit it will give to people of El Salvador who understand digital currencies. Where El Salvador has made bitcoin its national currency, a few countries have also banned bitcoin.
Only digital currency exchanges will be allowed to clear foreign transactions without getting licensed. However, following China’s ban on cryptocurrency exchanges, Japan has been trying hard to open its platforms for trading virtual currency.
El Salvador’s bitcoin buys updates, and the latest reports are mentioned above.