El Salvador buys 420 Bitcoin as asset regains $60,000

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Many might have seen Bitcoin’s recent price crash as an indication of its volatility but El Salvador’s President saw this as an opportunity to increase the country’s stash of the digital asset.

El Salvador buys the dip

President Nayib Bukele, in a tweet yesterday, revealed that the Central American country bought 420 additional BTC, which is worth around $25 million, thereby taking their total holdings to 1120 units of the asset.

Interestingly, some social media commentators have begun attaching the recent purchase to the popular marijuana slang with one Reddit user writing “Nice! Blaze it!.”

How do we make a profit if 1 #BTC= 1 #BTC?

We have a trust fund accounted in USD, but the trust is funded by both USD and BTC.

When the BTC part revalues in comparison to the accounting currency (USD), we are able to withdraw some USD and leave the trust with the same total.

— Nayib Bukele 🇸🇻 (@nayibbukele) October 27, 2021

The President shortly after revealing that the country has bought the Bitcoin dip also revealed that they were beginning to profit from their recent BTC acquisition.

According to him, profits were being made through the rebalancing of the country’s Bitcoin trust and this allows them to cash out their profits when the price of the asset rises.

It should however be noted that the wallet of the country remains unknown and as such it is almost impossible to verify the claims of the president.

Already, some Twitter users are already arguing against the opacity plaguing the country’s BTC holding. One Twitter user asked who was holding the private keys to the BTC wallet while another wondered why the digital asset is not being held in a publicly disclosed entity.

El Salvador made history last month when it became the first country in the world to officially buy the digital gold and also adopt it as a legal tender within its territory alongside the US Dollar.

Bukele had argued then that accepting BTC as a legal tender would help the country in the long run as it would easily allow diasporans remit more money to the country. According to him, the traditional financial institutions would charge much more for them to process these transactions.