Bitcoin city and El Salvadore's new Bitcoin splurge
As the cryptocurrency market crashes, El Salvadore’s president Nayib Bukele embraces the price drop and sees it as an opportunity to buy more Bitcoin.
This week Bitcoin has fallen to its lowest price since July 2021 and reached around $29,000 which enabled the pro-crypto leader to invest another $15 million of El Salvadore’s budget in Bitcoin. Bukele tweeted on Monday that El Salvador purchased 500 Bitcoins at the price of $30,744. El Salvador’s last crypto purchase happened in January of this year and equaled 410 Bitcoin, which roughly cost the same as the newest one.
Following Bitcoin and a general bear movement of the financial market, other leading cryptocurrencies like Ethereum and Solana went down in price, with experts unsure whether this trend is a long-term one. Yet Bitcoin proponents like Nayib Bukele are not the slightest concerned and seize the momentum to acquire more digital currency. which also coincides with El Salvadore’s latest grandiose project - Bitcoin City.
The concept of Bitcoin City was initially presented half a year ago. Following the latest Bitcoin purchase, the President of El Salvador shared an image on his official Twitter account, which depicted the crypto city situated by a volcano. The volcano is meant to power up the Bitcoin mining process as well as run the entire city’s electricity with geothermal energy. The soon-to-be city will be located next to the Conchagua volcano and construction is planned to begin sometime this year. The city won’t have any property or taxes and will also exclude any operations that result in carbon dioxide emissions, which might make it a gold pot for investments and economic prosperity.
El Salvador is the first country in the world to adopt cryptocurrencies on a governmental level and to make Bitcoin an official currency. As of now, El Salvador owns 2301 Bitcoin and spent $130 million in total on the popular cryptocurrency. However, since Bitcoin’s 50% drop on Thursday from an all time high price that exceeded $60,000, El Salvador has lost $36 million in cryptocurrency. The country currently has a national debt of around $23.3 billion.
Even though the digital currency trajectory of the country sounds promising, the National Bureau of Economic Research states in its latest report that only one-fifth of El Salvador’s citizens use digital currency as a payment method. Most of the population still relies on the US dollar in day-to-day life.