El Salvador's President Nayib Bukele announced early Monday that the government has acquired an additional 150 bitcoins, raising the country's total holdings to 700 BTC. The purchase came as bitcoin's price retreated from around $45,000 to the $43,000 range, prompting Bukele to declare on Twitter: "We just bought the dip. 150 new coins!" He added: "They can never beat you if you buy the dips … Presidential advice."
First Major Top-Up Since Bitcoin Law Took Effect
The Central American nation's groundbreaking bitcoin law went into effect on September 7, making bitcoin legal tender alongside the U.S. dollar. Prior to the law's implementation, the government had already purchased 550 bitcoins on September 6 and 7. The latest acquisition marks the first significant addition since the law's enactment, underscoring Bukele's commitment to the cryptocurrency strategy.
According to data from Bitcoin.com Markets, bitcoin's price hovered around $45,000 at the time of Bukele's announcement but subsequently fell to $43,326 as of writing. Market observers noted that the government's continued buying provides some short-term support but remains a relatively small factor in overall market dynamics.
Chivo Wallet Adoption Surges, Threat to Remittance Giants
The government's official digital wallet, Chivo, experienced a rocky launch with issues including identity verification failures and app crashes. However, on September 16, Bukele claimed the app was "already working 100%." By Friday, he reported that 1.1 million Salvadorans had already signed up, adding that "we haven't enabled 65% of phone models yet." He opined: "It seems that we will be able to bank more people in 1 month than they did with nationalizations and privatizations of traditional banks in 40 years."
If Chivo gains widespread adoption for remittances, traditional money transfer providers such as MoneyGram and Western Union could lose up to $400 million annually. El Salvador now hosts 205 crypto ATMs, making it the third-largest crypto ATM market globally after the United States and Canada. Meanwhile, the Salvadoran Court of Accounts is reportedly planning to investigate the government's expenditures on bitcoin ATM purchases and Chivo kiosk construction.
Ongoing Criticism and Challenges
The International Monetary Fund and local opposition lawmakers have expressed concerns about the potential financial stability risks posed by the bitcoin law. Yet Bukele's administration appears undeterred, doubling down on its "buy the dip" strategy. The latest 150-bitcoin purchase, estimated at an average price of around $44,500, represents a total outlay of approximately $6.675 million. El Salvador's total holdings of 700 bitcoins are now worth roughly $30.3 million at current market prices.
While the move has garnered support from cryptocurrency enthusiasts worldwide, it also faces legal scrutiny and audit challenges. The long-term impact of El Salvador's bitcoin experiment on its economy and the global financial system remains to be seen.