El Salvador Buys Additional 500 Bitcoin amid Recent Market Correction

UTC by Bhushan Akolkar · 2 min read
El Salvador Buys Additional 500 Bitcoin amid Recent Market Correction
Photo: Nayib Bukele / Facebook

El Salvador buys an additional 500 BTC for its reserves taking its total Bitcoin holdings to more than 2,300.

On Monday, May 9, the broader cryptocurrency market entered a strong correction. The world’s largest cryptocurrency Bitcoin (BTC) tanked under $30,000 for the first time since July 2021. El Salvador Nayib Bukele took the opportunity of the dip and purchased an additional 5,000 Bitcoins. With this, Bitcoin reserves held by El Salvador currently stand at more than 2,300. In his recent tweet, Bukele wrote:

“El Salvador just bought the dip!  500 coins at an average USD price of ~$30,744”.

Since this purchase, the price of Bitcoin has recovered by nearly 5%. As of press time, Bitcoin is trading at $31,928 with a market cap of $605 billion. The BTC price is down nearly 18% on the weekly chart. el Salvador is the first country to make Bitcoin a legal tender last September 2021.

As said the country currently holds over 2,300 Bitcoins in its reserve worth around $72 million as of the market rate. However, a large majority of its Bitcoin holdings are currently under losses.

Tron DAO Also Buys 500 Bitcoins

Following El Salvador’s recent purchase, the Tron Decentralized Autonomous Organization (DAO) has announced its purchase of 500 Bitcoin for over $15 million. The announcement reads:

“To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve have bought 500 #BTC with average price 31031.35 for $15,515,675”.

While El Salvador continues with its Bitcoin purchases, it has received several warnings from the Internation Monetary fund (IMF). The IMF has also asked El Salvador to give up Bitcoin adoption citing financial stability and consumer protection risks.

Bitcoin and US Equity

The recent correction in the Bitcoin and the broader crypto market follows a steep fall in the US equity market. On Monday, all three major US equity indices entered a strong correction. The tech-heavy Nasdaq Composite registered is the biggest single-day drop of 4.30% since 2020. The Nasdaq index is already down by 35% from its high in November 2021.

Bitcoin and the broader crypto market have been falling in tandem with US equity this year in 2022. As per data from CryptoQuant, whales have been moving their Bitcoins in major numbers to the exchanges. The announcement reads:

  1. All Exchanges Inflow hits a 1-year high
  2. Spot Exchanges Inflow hits over a 2-year high

Going ahead we might see further correction in Bitcoin price.

Bitcoin News, Cryptocurrency News, News
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