El Salvador has increased its bitcoin bet yet again with a new purchase. Back in September, the sovereign nation made history by becoming the first to officially implement bitcoin as legal tender. To commemorate the historic occasion, President Nayik Bukele announced that the country had purchased 200 bitcoins. Following the purchase, the country made a promise to buy more, which it kept.
Following this, the country purchased an additional 250 bitcoins. The third buy-in in September brought El Salvador’s total holdings to 700 coins. President Nayib Bukele has referred to the purchases at each of these stages as ‘buying the dip.’ These have proven to be correct, as El Salvador is currently profiting from its BTC holdings.
El Salvador purchases 420 BTC
Since the price of bitcoin reached a new high in October, the asset’s value has been declining. Following a series of minor drops, the price had fallen below $60,000. El Salvador has used this opportunity to increase its BTC holdings while the rest of the market is more cautious. In keeping with the previous sentiment, the president tweeted that the country had ‘bought the dip’ once more.
A follow-up tweet from the president confirmed that the country was now profiting from its newly purchased bitcoins. This is due to the fact that the purchase was made when the price was still hovering around $58,000, and by the time the follow-up tweet was posted, BTC’s price had risen back above $60,000.
It remains to be seen whether the BTC bet will pay off in the long run. However, El Salvador is reaping significant benefits from its investments in the digital asset in the short term. The initial batch of BTC was purchased for $52,000, and the asset has since reached a new all-time high of $67,000.
What Is the Process of El Salvador Bitcoin Profit?
President Nayib Bukele took some time to address some questions about the company’s investments in Bitcoin. He emphasized that the country operates on a 1 BTC = 1 BTC basis rather than focusing solely on the profits from the fiat value. This means that, while El Salvador’s bitcoin fund is denominated in USD, it is funded in both USD and BTC. They only take out gains in USD, leaving the fund with the same number of BTC that it started with.
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
El Salvador’s strategy is intriguing. It is, however, not unique. Bitcoin enthusiasts have long held that BTC is the currency of the future. As a result, the asset’s value in USD should not be used to gauge its worth. It should instead be measured in terms of its BTC value. As a result, 1 BTC = 1 BTC.