The President of El Salvador, Nayib Bukele, has announced via Twitter that the Latin American country will be acquiring one Bitcoin every day beginning tomorrow. While some commentators believe Bitcoin’s price could take another leg down before it finds a bottom, the asset has already fallen 75% in value compared to its all-time high which was achieved in November last year, so the country could be buying at good prices should it go ahead with its plans.
We are buying one #Bitcoin every day starting tomorrow.— Nayib Bukele (@nayibbukele) November 17, 2022
Bukele has been buying Bitcoin on behalf of the country for more than a year at this point. Under his leadership, the country became the first in the world to adopt Bitcoin as legal tender. Unfortunately for him, the country had been buying the asset while the price was relatively high (though, to be fair, he was buying the dips during the high period). Detractors, therefore, are still sceptical about the actions he has taken.
One of the issues weighing most on the price of Bitcoin right now is the collapse of the second-largest centralized crypto exchange, FTX. While the price took a several thousand dollar nosedive after this event played out, there are concerns over contagion – essentially, there could be other exchanges that were close to FTX and relied on it being operational for their own operations. Some exchanges, such as BlockFi, have already paused withdrawals.
While these collapses are likely to have an impact on the price of crypto, they do not change the fundamentals of crypto projects. Additionally, there are already a bunch of decentralized exchanges, which are likely to get more popular, ready to fill the void that centralized exchanges leave as they collapse.
If Bitcoin continues on with its boom-crash cycles going forward, Bukele could be picking up Bitcoin at the cheapest prices they’ll ever be again. Still, Bitcoin has never experienced a global recession and anything could still happen yet. If you’re thinking about buying Bitcoin, remember to only spend what you don’t mind losing, as the price is volatile, and you could even lose it all.
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