invezz.com
El Salvador’s President, Nayib Bukele, has taken advantage of the recent bears in the crypto market to buy Bitcoin (BTC/USD) after the coin dipped to $58,208.19 (£42,312.41).
The president disclosed this news on Twitter on October 27, noting that the country purchased 420 more. This purchase brought El Salvador’s BTC reserves to a total of 1,120.
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In a subsequent tweet, he pointed out that the country had already made profits from its latest purchase. Explaining El Salvador’s secret to making a profit without selling its BTC, Bukele noted that the country has a trust fund accounted in USD but funded in both USD and BTC.
Hahaha we’re already making a profit of the #bitcoin we just bought.
— Nayib Bukele 🇸🇻 (@nayibbukele) October 27, 2021
However, his explanation attracted criticism, with a Twitter user asking whether the government adds more USD to the trust if BTC revalues downwards. According to the user, adding USD to the trust would be the only way to maintain the trust’s total worth. With this in mind, he asked where the government gets the USD to balance the fund once whenever BTC plunges.
And do you put in more USD if BTC "revalues" downwards and you need to add dollars to "leave the trust with the same total"? I assume that would be the plan, so what is source of those USD?
— Tim Muth (@TimMuth) October 27, 2021
Another user questioned whether the news of buying the dip was meant for Salvadorans or the crypto community, seeing as Bukele’s tweets were in English and Spanish is the native language of El Salvador.
En el salvador hablan ingles o español?
— iriii_22 (@Iriii_22) October 27, 2021
EL Salvador’s journey with BTC
This news comes after El Salvador first purchased 200 BTC on September 6, one day before the flagship crypto became legal tender in the country. After BTC became legal tender in the country, the coin dipped, prompting the Bukele administration to buy another 200 BTC. The country then bought 150 BTC on September 19.
The latest purchase comes after BTC soared to a new ATH earlier this month due to the listing effect of the ProShares Bitcoin Strategy ETF. These gains helped the country recover the losses incurred after BTC plummeted to the $40,000.00 (£29,070.60) level at the end of September.
At the time of writing, BTC has recovered yesterday’s losses and is up 3.37% over the past 24 hours to change hands at $61,122.12 (£44,421.42). According to data from TradingView, BTC’s upward momentum is set to hold, seeing as its technical indicators are bullish. In the one-day chart, the Oscillators are neutral and the Moving Averages point to a strong buying force.