El Salvador’s Government Buys Bitcoin Again As The Price Drops Lower

El Salvador has purchased an additional 150 Bitcoins. The country’s Bitcoin stash is now edging closer to 1,300 tokens. The country’s reserve in Bitcoin is worth just over $60 million at the moment. The government did this after the biggest downward market trend since it hit its most recent peak, near $69k. The president disclosed the latest purchase as the crypto price dropped to almost $46k, a drop of over 15% in price. 

Details Of The Transaction 

The government disclosed that they purchased the coin around the $48k price point. The market value will go lower to the $42k price point, an almost 40% drop. The last known purchase by the government was around 420 Bitcoin in late October. In this purchase, the president, in a Tweet, expressed his disappointment at missing the major lows by a few minutes.

El Salvador’s Adoption Of Bitcoin And Bitcoin City

The nation’s cryptocurrency and, in particular, Bitcoin adoption rivals any seen elsewhere. The country has announced that it will be building a Bitcoin City. The government revealed that the city would be run with Bitcoin and not a central bank-issued currency. The president termed the city a progressive step in the next phase of human evolution.

The president informed audiences at an event that lasted a week to get people to invest in the country that residents of the Bitcoin city will have to pay only VAT. He revealed the government has plans to power the town with the heat from a nearby volcano. He committed to building a city that would be 100% green and promised prospective investors huge returns. 

President Nayib Bukele revealed his plans for utilizing the VAT during the conference. The president said that 50% of the VAT collected was to find the Bitcoin bonds that would facilitate the city’s running. The other 50% was to provide for certain social amenities and utilities. The president believes the cost of necessary structures at around 300,000 tokens. 

The announcement came roughly a month after the country became the only country to adopt the token as an acceptable currency. The government has faced some resistance to its push for massive Bitcoin adoption. President Nayib has compared the idea to cities established by Alexander the Great. The city will reportedly feature a plaza at its core that will resemble the Bitcoin logo from an aerial view.

The president thinks that to increase the adoption of Bitcoin, then cities fueled by the currency will play an important role. The president has expressed plans to start selling  Bitcoin bonds next year. The chief strategy officer of Blockstream, Samson Mow, disclosed that the bond sold for the first decade would be valued at around a billion dollars. The bonds will offer investors over 6% in returns annually; 50% of the bonds are expected to purchase more Bitcoins.

Samson reveals that the government will sell off some Bitcoin, backing the bond after half the decade to give investors additional profit. The industry executive believes that the plan will make El Salvador a force to reckon with financially. The government is set to partner with Bitfinex to work on new securities legislation.

By Edward Harris
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