There is no country with a leadership quite as hung up on cryptocurrency as El Salvador.
The central American nation was the first in the world to adopt bitcoin as legal tender and bought 150 bitcoin during a dip in September 2021.
Its president, 40-year-old Nayib Bukele, has been a very vocal proponent of the cryptocurrency,
He constantly extols its virtues as a way of bringing the country forward despite rising evidence that it only exacerbated corruption.
El Salvador Can't Stop Buying The Dip
Despite recent surveys showing that 95% of El Salvadorans don't support forced adoption of bitcoin, Bukele rarely misses an opportunity to buy the dip for his state — and, subsequently, brag about buying the dip.
In the past, Bukele has even bragged about trading bitcoin on his phone while "naked" or "in the toilet."
The cryptocurrency, which is currently at its $31,850 USD or the lowest price since July 2021, is currently in the midst of a "dip."
In both investing and cryptocurrency circles, this is the term used for an opportunity to buy an asset that is sure to appreciate long-term.
The current downturn appears to be widespread across the cryptocurrency, with ethereum and solana also seeing drops in prices.
In November, bitcoin reached an all-time high of $67,802 and has been trending downward since.
"El Salvador just bought the dip!" Bukele wrote in a May 9 Twitter (TWTR) post. "500 coins at an average USD price of ~30,744."
At 500 coins, this purchase is the largest El Salvador has made since it started buying the dip.
Some of the other big purchases made by the country's federal government include 410 bitcoin purchased in January 2022, 171 bought in December 2021, 100 bought in November 2021 and 150 bought in September 2021.
"150 new coins!" Bukele wrote on Twitter in September 2021.
This totals 2,301 Bitcoin since the country made it legal tender.
Are Governments Really Buying Cryptocurrency Now?
There is no denying that bitcoin saw its value soar since coming on the scene in 2009.
In the last five years, it saw its value soar by nearly 1,500% before dropping by 46% in the last year.
So far at least, cryptocurrency has been on an overall upward trajectory despite ebbs and flows in the short-term.
But as all cryptocurrency remains a very volatile investment, experts say that what could be an opportunity to play around and see what happens for private investors is not exactly sound economic strategy for a federal government.
This is particularly true when the majority of people do not have an opportunity to make purchases with bitcoin.
Numbers from the National Bureau of Economic Research show that only 60% of all citizens 60% downloaded the Chivo Wallet needed to make purchases in bitcoin.
While El Salvadoran law technically requires all businesses to accept payments in cryptocurrency, only 20% of all businesses currently due so.
That is because only large organizations have the necessary technology.
What's more, basing an entire country's economy on such a volatile currency is basically playing with fire.
With the value of bitcoin falling, estimates from Moody’s analysts found that one of the poorest countries in North America has lost more than $22 million in reserves.
"El Salvador now has the most distressed sovereign debt in the world, and it’s because of the bitcoin folly," economist Steve Hanke recently told Fortune.
"The markets think that Bukele's gone mad, and he has"
