Shalini Nagarajan

<div id="highlights-block_62beb33548809" class="highlights">
 <ul>
 <li>President Nayib Bukele posted screenshots showing 40 bitcoin purchase transactions</li>
 <li>“We may be forming a bottom in the $20K range,” a crypto exec told Blockworks</li>
 </ul>
 
</div>



El Salvador has bought the bitcoin dip yet again, piling into the cryptoasset as a market meltdown has led to steep drops in its price.



President Nayib Bukele said on Friday that the country bought 80 bitcoin at $19,000, worth around $1.5 million. “Thank you for selling cheap,” he wrote in a <a href="http://tweet" target="_blank" rel="noreferrer noopener">tweet</a>, which included screenshots of the purchase transactions.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">El Salvador bought today 80 <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw">#BTC</a> at $19,000 each!<a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> is the future! Thank you for selling cheap 😉 <a href="https://t.co/ZHwr0Ln1Ze">pic.twitter.com/ZHwr0Ln1Ze</a>&mdash; Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1542672286490271744?ref_src=twsrc%5Etfw">July 1, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The country’s last bitcoin purchase was in May when it <a href="https://twitter.com/nayibbukele/status/1523742670044413954?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1523742670044413954%7Ctwgr%5E%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fcms.blockworks.co%2Fel-salvadors-reserves-tumble-as-bitcoin-extends-losses%2F" target="_blank" rel="noreferrer noopener">bought 500 bitcoin</a> at an average price of $30,744 each, bringing its total holdings to <a href="https://cms.blockworks.co/el-salvadors-reserves-tumble-as-bitcoin-extends-losses/" target="_blank" rel="noreferrer noopener">2,301 bitcoins</a>, worth roughly $71.4 million at the time. With its latest purchase and tumbling prices, El Salvador now holds 2,381 bitcoin worth $46.4 million, according to Twitter updates from Bukele.



El Salvador&#8217;s president is once again trying to “buy the dip,” this time as bearish market sentiment from hawkish central banks and a series of major cryptocurrency firm blow ups have prices trading near the 2017 all-time high level.



Bukele has said he trades his country’s bitcoin <a href="https://cms.blockworks.co/fraud-funding-woes-and-a-president-who-wont-quit-el-salvadors-bitcoin-experiment/" target="_blank" rel="noreferrer noopener">on his mobile phone</a>. His first purchases were in September 2021, when bitcoin was trading at around $52,000, according to the <a href="https://nayibtracker.com/" target="_blank" rel="noreferrer noopener">Nayib Bukele Portfolio Tracker</a> website, and he hasn’t shown a particular penchant for market timing. His second-largest purchase in bitcoin terms was 420 BTC on October 27, 2021, when bitcoin was trading at $60,345.



Because of market turbulence, El Salvador has continued to delay its highly-anticipated “<a href="https://cms.blockworks.co/el-salvador-pushes-volcano-bond-issue-unveils-state-owned-company-backing/" target="_blank" rel="noreferrer noopener">volcano bonds</a>” — which were slated to be issued by March 20. This planned $1 billion bond offering is meant to fund the country’s “bitcoin city,” a community at the base of the <a href="https://elsalvadorinfo.net/conchagua-volcano-el-salvador/" target="_blank" rel="noreferrer noopener">Conchagua volcano</a>. 



Yet, some industry commentators believe the bottom might be near. JPMorgan analysts said in a <a href="https://cms.blockworks.co/crypto-deleveraging-cycle-wont-last-much-longer/" target="_blank" rel="noreferrer noopener">note</a> Wednesday the deleveraging that triggered the recent crypto rout may not last much longer and pointed to strong venture capital funding in the industry as a positive sign.



Chris Terry, board member and vice president at lending platform SmartFi, told Blockworks he sees a “weak bottom” in bitcoin. “We may be forming a bottom in the $20K range,” he said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“If bitcoin would have gone into the low teens, $12-14K, I would feel better about it. That would be a bottom I could believe in.”</blockquote>



Les Borsai, co-founder at Wave Financial, echoed that sentiment. “Most of the would-be sellers have already sold, and so at this point, you’re going to be left with long-term holders and lots of interested buyers,” he said.



El Salvador’s president has <a href="https://twitter.com/nayibbukele/status/1523913922545344512" target="_blank" rel="noreferrer noopener">signaled</a> that he wants the nation to hold onto its bitcoin purchases. Finance Minister Alejandro Zelaya <a href="https://www.reuters.com/markets/us/el-salvador-minister-says-bitcoin-crash-poses-extremely-minimal-fiscal-risk-2022-06-13/" target="_blank" rel="noreferrer noopener">brushed off concerns</a> last month that bitcoin’s plunge in value would affect the country’s fiscal health, saying the risk is “extremely minimal.”



In total, the nation’s BTC portfolio is down about $60 million, or -57%.



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El Salvador Snaps Up Another $1.5M in Bitcoin, but Sits Heavily in the Red

Casey Wagner

<div id="highlights-block_623b30beda87c" class="highlights">
 <ul>
 <li>El Salvador is changing its approach to the bond issuance, delaying and modifying the previously announced plan</li>
 <li>The successful roll out of bitcoin mining is seen as key for President Nayib Bukele’s government as prospects for International Monetary Fund funding are slim</li>
 </ul>
 
</div>



El Salvador has postponed the issue of its highly anticipated volcano bonds, which were originally slated to be issued by March 20, according to Finance Minister Alejandro Zelaya.&nbsp;



Nayib Bukele, El Salvador’s president, introduced the bitcoin-backed bonds in November 2021. They are supposed to raise $1 billion for the Central American nation’s “bitcoin city,” a community at the foot of the <a href="https://en.wikipedia.org/wiki/Conchagua_(volcano)" target="_blank" rel="noreferrer noopener">Conchagua volcano</a>, complete with mining operations and low taxes, Bukele promised.



Zelaya told bondholders earlier this month that the bitcoin bonds will now be backed by La Geo, a state-owned thermal company, according to Nathalie Marshik, head of emerging markets sovereign research at Stifel Financial.



Zelaya had previously stated that the war in Ukraine might impact timing of the bond issuance, with market appetite for risky assets dwindling.



The bonds will be issued on the Liquid Network, a Bitcoin layer-2 established by <a href="https://cms.blockworks.co/?s=blockstream" target="_blank" rel="noreferrer noopener">Blockstream</a>. While Blockstream is providing the technology, it is not working directly with the El Salvador government on the bonds, a spokesperson from the company said.



Launching the bond is still essential for combating El Salvador’s slim loan prospects and mounting debt, Marshik said. The International Monetary Fund has <a href="https://cms.blockworks.co/el-salvadors-volcano-bond-could-launch-this-week/" target="_blank" rel="noreferrer noopener">made clear its disdain</a> for the adoption of bitcoin as legal tender.



The postponement comes as speculation around other Latin American countries leaning into digital assets swells. <a href="https://digitnews.in/the-president-of-honduras-may-announce-the-legalization-of-bitcoin-in-the-country-tomorrow/" target="_blank" rel="noreferrer noopener">Honduras</a> or Malaysia may become the second nation after El Salvador to adopt bitcoin as legal tender, <a href="https://www.thestreet.com/investing/cryptocurrency/malaysia-may-be-the-next-country-to-make-bitcoin-legal-tender" target="_blank" rel="noreferrer noopener">according to news reports</a>.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.