President of El Salvador, Nayib Bukele, said on behalf of his government, they have purchased 400 Bitcoins to mark the effectiveness of the Bitcoin law as a legal tender today, Tuesday, September 7, 2021. Bitcoin price shot above $52,000.
Bukele admits that that much Bitcoin was bought on Monday, September 6, 2021. At first it was only 200 BTC, then it grew to 200 BTC. Currently, El Salvador’s official Bitcoin holdings are 400 BTC, as quoted by Reuters.
Bitcoin law as a legal tender, was approved by the local parliament in early June 2021 yesterday.
According to the 40-year-old president, Bitcoin will save on the cost of sending El Salvadorans working abroad to El Salvador.
Bitcoin in El Salvador Not Required
While the use of Bitcoin is not mandatory, polls show El Salvadorans are skeptical about Bitcoin use, wary of price volatility that some critics say can increase regulatory and financial risks for financial institutions.
“Starting September 7, residents can download the application to receive payments or gifts in Bitcoin or US dollars. Citizens are free to choose to use the application or not use it if they don’t want to,” Bukele explained at the time.
Even some time ago, several veterans and retirees took to the streets. They protested, refusing to have their pensions paid in Bitcoin.
Previously, according to an opinion poll by the local business community, it was similar. They doubt that paying employees salaries using Bitcoin is actually difficult. They rejected that obligation and demanded clearer regulations.
The Bukele Government immediately responded to this demand, that the issue of paying employees using Bitcoin would be reconsidered.
El Salvador itself has two legal currencies as a means of payment, namely the US dollar since 2001 and now the latest is Bitcoin, effective today, September 7, 2021.
That way this Latin American country, recorded in the sheets of world history, as the first country to adopt Bitcoin as a legal tender, equals the US dollar.
Bitcoin Price Continues to Rise
Meanwhile, at the time of the announcement, the price of Bitcoin continued to rise, completing the good gains since July 20, 2021 yesterday.
Perched above $52K, this opens a great opportunity to break through the psychological zone, which is $60K per BTC. The all-time high was $64,400 on April 14, 2021 yesterday.
Senior Analysts from Bloomberg Intelligence project the price of Bitcoin to reach $100K per BTC this year, followed by ETH to $5K. The price of ETH has initially touched a critical level of $4K recently.