Robert Steinadler, 22 days ago

El Salvador pledges to buy 1 Bitcoin per day

There is not a lot of good news available lately, but it seems that one particular player in the market is keeping up the good work. El Salvador is a small country and not economically powerful. Nevertheless, its president Nayib Bukele came up with yet another powerful plan.

Why is El Salvador buying more Bitcoin on a daily basis, and why is this a sound plan despite current market conditions?

Bukele and Sun both pledge to buy BTC

This is not the first time El Salvador is buying Bitcoin. The country introduces BTC as legal tender in September 2021 and invest on several occasions into Bitcoin. El Salvador accumulated around 2381 BTC over the last 14 months or so.

This initial investment is down around $50 million of unrealized loss. So far, president Bukele kept on buying throughout the bull market which wasn’t the best investment decision in hindsight. His country, on the other hand, is profiting of the growing Bitcoin economy. A stream of companies has settled in El Salvador with the hope to find everything they need and optimal regulatory backup from the country’s president.

Bitcoins bonds and the Bitcoin City, on the other hand, are still postponed given the fact that the start of both projects has been stalled during bear market.

DCA is king

It was today when Bukele announced on Twitter that his country would start to buy 1 BTC per day starting tomorrow. Only 1 hour later Justin Sun, the figurehead and founder of Tron (TRX), assisted the president of El Salvador pledging publicly to do the same.

This is not only a marketing stunt, but a long-term strategy that is applied by many investors throughout different assets classes worldwide. The so-called dollar cost average effect (DCA) is powerful since it is a strategy that worries less for the optimal point in time to enter the market.

The basic idea behind DCA is, that time in the market always beats timing the market. By buying at arbitrary points in time, the average cost for the position is lowered if the market keeps going down. As soon as the winds pick up again, DCA investors reap their rewards. It seems that Bukele is aiming to profit from the effect and stabilize the value of his country’s investment. While he announced to start by tomorrow, it is not clear when and if El Salvador is ever going to stop buying BTC.

Featured articles
Four trading strategies for crypto
Bitcoin and Ethereum: what are the differences?
What determines the Bitcoin price?
Related articles
Block Inc. and Strike driving Bitcoin adoption in Africa

Dec 07, 2022

Africa is one of the places where many blockchain related projects promise to change things for the better. Cardano has entered partnerships in Ethiopia and Tanzania to educate developers and offer blockchain-based solutions in several fields. Bitcoin, on the other hand, is open-source and not driven by a single company unlike Cardano, but there are still players which expect that Bitcoin will make a positive impact on the continent.

Trade anytime, anywhere

Boost your trading impact and reaction time in over 80+ cryptocurrencies via instant access to your portfolio with the LiteBit app.

  • 2525 Ventures B.V.
  • 3014 DA Rotterdam
  • The Netherlands
More info
  • About LiteBit
  • Careers
  • Business account
  • Support
  • Sell
  • News
  • Education
Subscribe for updates

Sign up to stay informed via our email updates

Explore popular coins
© 2022 LiteBit - All rights reserved