Panic: an opportunity? – September 7, 2021 was supposed to be a day of celebration for the cryptosphere: the first “Bitcoin Salvador Day,” with the king of cryptos becoming, by law, a legal currency in one country. But the market abruptly ended the celebration, when the BTC price experienced a -10% flash crash.
However, the Salvadoran president does not seem to be overly concerned. On the contrary, he saw it as an opportunity.
An accumulation of BTC that does not intend to end
Early this Tuesday, September 7, President Nayib Bukele officially announced that El Salvador had acquired for its Treasury the first 200 bitcoins of the country. In addition to Bitcoin’s entry into force as a legal tender, this day was therefore also the first day that a nation purchased BTC on behalf of itself and its people.
The rest of the day, however, did not go as well as one might have hoped, given its symbolic and historical importance in the growing adoption of Bitcoin.
Between 4 and 5 p.m. Paris time, the price of BTC experienced a violent flash crash, which took the king of cryptos from $50,000 to a very brief low of $42,000, before stabilizing around $46,000/47,000.
As we’ll see, this has in no way slowed the Salvadoran government’s forward march in integrating Bitcoin into its economy.
A war chest of 550 BTC from day one
As “weak hands” prematurely dropped their crypto-currencies and leveraged speculators were brutally liquidated for billions of dollars, Salvadoran President Nayib Bukele explained that government departments continued to buy Bitcoin during the flash crash, taking advantage of these broken prices, in an impressive example of ” buy the dip
At the very depths of this flash crash, El Salvador acquired an additional 150 BTC for its treasury, as its leader detailed in a tweet.
Nayib Bukele’s post – Source: Twitter
In his next post, Nayib Bukele even took the liberty to poke fun at the International Monetary Fund (IMF) a bit
.MI) in passing. This supranational organization had indeed violently threatened El Salvador and its president for this initiative making Bitcoin a legal currency.
Nayib Bukele ironically thanked the IMF for “saving a million [dollars] in printed paper” with these “lightning balances”, perhaps implying that this very sudden attack on Bitcoin’s price was not entirely coincidental.
At the end of this somewhat crazy day, which will forever mark the crypto community, El Salvador as a state owned 550 BTC on behalf of its People, or more than $25 million following the still feverish BTC price.
Despite what is hoped to be only a small setback in Bitcoin prices, the Salvadoran example could snowball and inspire other emerging countries, most notably in South America. Among the latter, Honduras has actually recently taken a decisive first step towards Bitcoin adoption.
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