(Kitco News) El Salvador made history on Tuesday as it became the first country to adopt bitcoin as legal tender. But bitcoin’s price reacted to the milestone with its usual unpredictability – at one point, plunging 17% on the day.
To prepare for the big day, the country’s President Nayib Bukele bought 400 bitcoin worth more than $20 million.
Bukele revealed the latest purchase in a series of tweets on Monday.
El Salvador has just bought it’s first 200 coins.
Our brokers will be buying a lot more as the deadline approaches.#BitcoinDay #BTC🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
El Salvador just bought 200 new coins.
We now hold 400 #bitcoin#BitcoinDay 🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
On top of being able to pay with bitcoin in El Salvador, each citizen that registers with the nation’s wallet app called Chivo will receive $30 worth of bitcoin.
Many key figures in the crypto space encouraged and congratulated El Salvador, including MicroStrategy CEO Michael Saylor and Binance CEO Changpeng Zhao.
So far, only 1 country in the world uses #crypto as legal tender. Just the beginning.
— CZ 🔶 Binance (@cz_binance) September 7, 2021
Saylor even asked other bitcoin bulls to buy an additional $30 of BTC to support El Salvador.
On September 7, El Salvador will officially begin using #Bitcoin as its national currency alongside the U.S. dollar. Every cyber hornet 🐝 I know is planning to buy $30 in BTC tomorrow in solidarity with the people of #ElSalvador and their leader @nayibbukele. Will you join us?
— Michael Saylor⚡️ (@michael_saylor) September 6, 2021
Bitcoin saw wild $10,000 price swings on Tuesday. First, the popular cryptocurrency surged to nearly $53,000 on the El Salvador news but then plunged and hit a low of $42,921.27. At the time of writing, bitcoin was trading at $46,749.90, down 9.43% on the day.
The bitcoin rollout did see some hiccups as the Chivo wallet app was not available on popular app stores, with Bukele saying that the government had to temporarily unplug the digital wallet to cope with surging demand.
Bukele tweeted out his frustration with Apple, Google and Huawei:
Release him! 😡@Apple, @Google, @Huawei #BitcoinDay #BTC🇸🇻 https://t.co/pE3LPtj9Uo
— Nayib Bukele 🇸🇻 (@nayibbukele) September 7, 2021
But despite the first-day snags, people were out on the streets testing the new system and successfully paying with bitcoin at McDonald’s and coffee shops.
Just walked into a McDonald’s in San Salvador to see if I could pay for my breakfast with bitcoin, tbh fully expecting to be told no.
But low and behold, they printed a ticket with QR that took me to a webpage with Lightning invoice, and now I’m enjoying my desayuno traditional! pic.twitter.com/NYCkMNbv7U
— Aaron van Wirdum (@AaronvanW) September 7, 2021
Flawless experience using @MuunWallet here in El Zonte to buy all sorts of things with Bitcoin 👌
If you visit, make sure to stop by for a coffee with Karla, an excellent barista.
You can tip her instantly from anywhere in the world with Lightning here:https://t.co/qFWYI0bt4e pic.twitter.com/ruyBLWrRy7
— Alex Gladstein 🌋 ⚡ (@gladstein) September 2, 2021
El Salvador’s leader did warn of some volatility ahead and told its citizens to stay focused.
Incoming FUD!
Tons of it.
Stay focused.#Bitcoin🌎🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
Bukele added that making bitcoin legal tender will save Salvadorans living abroad millions of dollars in commissions when they send money back home.
Last week, to help with the conversion of bitcoin into U.S dollars, the nation’s Congress passed a law to create a $150 million fund.
But Salvadorans are still skeptical of the move. The latest survey from the University Institute of Public Opinion (Iudop) showed that seven out of ten citizens believe the Bitcoin Law should be repealed.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
