In the late hours of yesterday, the president of El Salvador, Nayib Bukele, announced on Twitter that the nation had bought 500 Bitcoin at an average price of $30,744.
This is not the first time, as the young president is known to buy more Bitcoin whenever its price drops, to collect as much as possible in profit.
El Salvador has bought more Bitcoin since its price began to decline from all-time highs in the fall of 2021, meaning that the nation’s crypto position is currently underwater.
This is El Salvador’s 10th crypto purchase since it adopted Bitcoin as legal tender last September. Its last accumulation of Bitcoin was in January when it bought 410 BTC at an average price of $36,585.
It made two relatively small purchases in December, around $49,000 each. In November, it bought 100 BTC for just over $54,000. In October, it purchased 420 Bitcoin at an average price of $58,800, and it completed four separate purchases of BTC last September at prices ranging from $43,000 to $47,000.
Yesterday’s purchase was the lowest price at which the country has ever bought Bitcoin, and it also marks El Salvador’s largest single purchase of the flagship asset.
At the current market price, the nation holds around 2,301 bitcoin, worth approximately $72.3 million.
Crypto Market Crash
Bitcoin plummeted to its lowest level since July 2021 yesterday. It dropped to as low as $30,331. The largest cryptocurrency by market cap has dropped around 18% so far in May, losing more than half its value since hitting an ATH of $69,000 in November.
Bitcoin has not plunged alone, the total value of all cryptocurrencies has dropped by almost 50%.
In November 2021, the total crypto market capital reached $2.79 trillion, but at the moment it is at $1.44 trillion according to CoinMarketCap.
Ethereum, the second largest cryptocurrency, is currently down 16% in the past one week, sitting at $2,374.
However, bitcoin, the leading digital asset has stabled a bit in the last ten hours, settling around the $31,400 region.
What caused the crash?
The crypto market crash is happening during a downturn that is affecting all markets, including tech stocks and traditional markets. This suggests that the crypto market is becoming more tightly connected to the global economy.
The current crash has also been attributed to the equity market. As the equity market was crashing, cryptos started to crash simultaneously. The recent correlation in prices between cryptos and equities started surfacing at the beginning of 2020.
According to The Wall Street Journal, most of the trading in crypto is now being carried out by professional investors who see crypto as a “risk asset.” As a result, “the [crypto] market has increasingly moved in tandem with traditional markets,” The Journal stated.
Experts cannot determine if this is going to be a longer-term bear trend, or just a temporary dip.
What next for crypto?
The disruptive technology will continue to be resolute. This dip is the best time for investors and traders to ape into coins with real-life utility because they would definitely bounce back.
Regardless of what is going on in the market, most longer-term Bitcoin price predictions by crypto publications and analysts remain bullish.
DigitalCoinPrice expects Bitcoin to reach $43,000 by December and nearly $54,000 in June 2023. Gov Capital predicts Bitcoin’s value to surpass $69,000 in the next one year and Wallet Investor believes the flagship asset will trade for nearly $55,000 this time next year.
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