El Salvador "bought the dip," added 150 Bitcoins to its holdings

Shawn Knight

Posts: 13,518   +132
Staff member
The big picture: El Salvador is seemingly doing everything right as it relates to its adoption of Bitcoin as an official national currency, but the feelings from the community haven’t been reciprocal as of yet. Will its latest stunt pay off?

Just one day into the experiment, which officially started on September 8, Bitcoin fell from more than $53,000 to around $46,500 according to Coindesk. Value recovered a bit over the past week and a half, but slid again over the weekend. El Salvador saw this as the perfect opportunity to time the market.

Late Sunday evening, El Salvador President Nayib Bukele said his country had just “bought the dip,” adding 150 additional Bitcoins to holdings. In total, the country now owns 700 Bitcoins, which equates to around $30.8 million at the current trading rate of $43.964.59.

“Buying the dip” and other catch phrases are common on Reddit, Twitter and other social platforms where people try to hype their preferred cryptocurrencies. We’ve even seen Elon Musk and other celebs get in on the action, but there’s something altogether different about it when it’s the president of a nation doing so.

Replying to his own message, Bukele added, “They can never beat you if you buy the dips.”

Of course, if it were that easy, everyone would be doing it. The obvious problem here is that without a crystal ball or some other insider information, you never know when a dip truly happens until after the fact. Crypto's notorious volatility only adds more risk to the equation, which is further amplified by the fact that this is government money that's at stake.

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Dimitriid

Posts: 1,136   +2,156
Yeah I'm sure other Latin American countries should follow the advice of a country run by a guy who openly called himself "Salvador's Dictator" in response to protests against him: Just keep buying the dip while people starve I'm sure it will eventually, through the magic of the free market, fix the issues in Latin America for the very first time ever even.
 

Squid Surprise

Posts: 4,283   +3,516
With many 3rd world countries, national currencies are incredibly volatile. Many simply use the US Dollar - but then you are tying yourself to a different anchor...

With Bitcoin, the nation won't be reliant on another for their currency, and while volatile, not nearly as much as their own previous currency.

What is scary is that the entire nation's holdings total 30 million... there are certainly many individuals who have more than that... I know my own province (Ontario, Canada) spends more than that in a week on road maintenance...
 

VitalyT

Posts: 5,952   +6,211
Well, I can see why it collapsed again. Every news about El Salvador buying bitcoin works as a jinx, because their volume reassures each time - they don't mean business, and all that BTC acceptance there was just a big joke.
 

seeprime

Posts: 600   +753
It would be hilarious if El Salvador becomes the richest country in the world by simply being the first that is buying Bitcoin.
If they bought it and set up mining gear when it first came out at 50 cents they indeed would be fabulously wealthy now. Anyone would be if they thought the gamble was worth it many years ago. Buying bitcoin at a five figure price doesn't seem to be a great way to grow wealth now, just at way to pay and accept payments mostly unnoticed.
 

Theinsanegamer

Posts: 2,724   +4,259
El Salvador has an economy about 0.12% the size of the US.

That's the entire economy, not just the government holdings. Even if they put all of their money in Bitcoin and it increased in value a hundredfold, they would not be anywhere near the richest country.

Fanciful thinking is pretty commonly visible in the utterings of crypto adherents.
Dude, chill and go touch grass. He said it'd be hilarious, likely though its utter rediculousness.
 

Beerfloat

Posts: 303   +532
Dude, chill and go touch grass. He said it'd be hilarious, likely though its utter rediculousness.

I reckon you're unfamiliar with the poster's crypto advocacy.

Let me highlight what I think is hilarious. If El Salvador's state crypto holdings would increase in value a hundredfold, they would equal 0.23% of the value of Norway's sovereign pension fund.
 

NightAntilli

Posts: 776   +974
El Salvador has an economy about 0.12% the size of the US.

That's the entire economy, not just the government holdings. Even if they put all of their money in Bitcoin and it increased in value a hundredfold, they would not be anywhere near the richest country.

Fanciful thinking is pretty commonly visible in the utterings of crypto adherents.
I said it would be hilarious. I didn't say it would happen.

That being said, calculating how rich a country is by total net wealth is not a good metric. The only measure that actually makes sense is per capita. That's how you calculate wealth when there's a large divergence in population numbers. Even then, I don't know if it can happen. But, it still would be hilarious if it does.
 

Squid Surprise

Posts: 4,283   +3,516
The consensual illusion of cryptocurrency continues unabated. I wonder when the cold water will be thrown?
Please explain how cryptocurrency is any less "real" than national currency?

Both rely solely on the belief that they can be exchanged for goods and services.

NEITHER are backed up by gold or any other precious metals...
 

Beerfloat

Posts: 303   +532
Please explain how cryptocurrency is any less "real" than national currency?

Both rely solely on the belief that they can be exchanged for goods and services.

NEITHER are backed up by gold or any other precious metals...
And let's not pretend gold itself has any great economic use. It too derives most of its value from belief that its rarity makes it worth x number of goods and services.
 

OortCloud

Posts: 648   +521
Please explain how cryptocurrency is any less "real" than national currency?

Both rely solely on the belief that they can be exchanged for goods and services.

NEITHER are backed up by gold or any other precious metals...
Well the second largest economy in the world (China) has banned it - I'd say that alone should be setting off some alarm bells. I can't imagine China is going to ban 'normal' national currency anytime soon, can you?
 

umbala

Posts: 413   +587
With Bitcoin, the nation won't be reliant on another for their currency, and while volatile, not nearly as much as their own previous currency.
Hilarious comment. What do you think they used to buy those Bitcoins? That's right, currency! What are they going to get for it when they eventually sell it? Yup, currency again. Since Bitcoin will never replace any existing currency and cannot actually be used as currency because of its nature (extremely slow verification compared to real currency) it means you're still tied to actual currency.

Also, this is a COUNTRY we're talking about here. They bought about $30 million worth of bitcoin, which is just laughable.
 

igotdembombs

Posts: 20   +3
And let's not pretend gold itself has any great economic use. It too derives most of its value from belief that its rarity makes it worth x number of goods and services.
I'm allowing myself to get baited but techspot comments, but, clearly you don't know that gold is used in pretty much every single circuit board because of its conductivity. It's not like diamonds where you can just make it in a lab.
 

Norsiiii

Posts: 85   +110
And let's not pretend gold itself has any great economic use. It too derives most of its value from belief that its rarity makes it worth x number of goods and services.
Gold backed currencies are not stable due to the fact that gold has any intrinsic value (indeed, you are correct that even gold itself derives its value from the same 'mere agreement' between people as any other currencies do) but rather it is stable because its supply is limited by the amount of gold physically in existence, which can only be increased by physically mining more.

It simply is not possible to increase the amount of gold by even just 5% in a given financial year. That is in total contrast to fiat currencies, the supply of which can be doubled, tripled, or centupled practically overnight...

That is the reason why gold-backed currencies are more stable, and in that sense, long term once the new/speculative nature of cryptos has run its course, they too will be stable for the same reason - their supply is mathematically limited
 

Beerfloat

Posts: 303   +532
I'm allowing myself to get baited but techspot comments, but, clearly you don't know that gold is used in pretty much every single circuit board because of its conductivity. It's not like diamonds where you can just make it in a lab.
Actually, industrial use is just a tiny percentage of total gold mined. Alloys that can mimic gold's qualities are readily available, should pricing become prohibitive.

I maintain that the gold price is mostly driven by people wanting teh shiney to Gollum on. And there is a finite amount of people from India and rappers who require fugly jewelry to feel good.
 

Beerfloat

Posts: 303   +532
It simply is not possible to increase the amount of gold by even just 5% in a given financial year. That is in total contrast to fiat currencies, the supply of which can be doubled, tripled, or centupled practically overnight...
Sure but that is actually a feature to many economists, even conservative ones. I wouldn't want to get into that discussion tbh, for risk of running into a pack of hungry libertarians.

But it's also why cryptos like dogecoin, which has an unlimited supply, are somewhat likelier to succeed as actual currency rather than just a speculative store of value.
 
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Squid Surprise

Posts: 4,283   +3,516
Well the second largest economy in the world (China) has banned it - I'd say that alone should be setting off some alarm bells. I can't imagine China is going to ban 'normal' national currency anytime soon, can you?
So your logic is - someone else doesn't like it, so it must be bad?

China is a dictatorship - anything they don't control will obviously not be something they support.
Hilarious comment. What do you think they used to buy those Bitcoins? That's right, currency! What are they going to get for it when they eventually sell it? Yup, currency again. Since Bitcoin will never replace any existing currency and cannot actually be used as currency because of its nature (extremely slow verification compared to real currency) it means you're still tied to actual currency.

Also, this is a COUNTRY we're talking about here. They bought about $30 million worth of bitcoin, which is just laughable.
Yes... but Bitcoins CAN be used to purchase goods and services - more and more every day... and since El Salvador is purchasing them, do you think they will allow people to use them as *gasp* currency? I'm thinking yes...

Also, Bitcoins can be MINED as well...
 

Watzupken

Posts: 339   +320
I feel the news is like an attempt to try and generate some positive news to boost prices of Bitcoin. It does appears that their buying of Bitcoin news is not generating the hype. It's funny that just a tweet by Musk have so much more impact, than a nation actually buying it.
 

NightAntilli

Posts: 776   +974
I feel the news is like an attempt to try and generate some positive news to boost prices of Bitcoin. It does appears that their buying of Bitcoin news is not generating the hype. It's funny that just a tweet by Musk have so much more impact, than a nation actually buying it.
Regular people have a higher respect for Elon Musk than for El Salvador or Najib Bukele. And the fact that Elon Musk has deeper pockets influences this as well.
Michael Saylor also bought a bunch of Bitcoin again, but he simply doesn't have the traction that Elon Musk has.

I also think that Musk's influence is exaggerated. The market pumped and dumped multiple times by extreme amounts before and after his tweets. And many of his tweets didn't get a market reaction at all.