Following an announcement that the Bitcoin nation-state of El Salvador had bought the dip, President Nayib Bukele released a model of Bitcoin City.
Building the Bitcoin City
Several pictures that debuted today show the golden city with a Bitcoin centerpiece and a caption from Bukele that reads, “Bitcoin City is coming along beautifully.”
Bitcoin is experiencing tumbles as its price dropped to the lowest it has been since July 2021 over the past week. Currently, the crypto is trading at $31,569, down 17% from the past week.
According to local news, Bitcoin City will be located near La Unión, a small Salvadoran city. It will have zero income, payroll, property, capital gains, municipal taxes, and CO2 emissions.
In his post, Bukele showed multiple pictures of various landmarks featured in Bitcoin City, including one that looks like it’s a massive bitcoin. He then stated that the project won’t be “golden.” Although the architect chose colors, Bitcoin City will still feature a lot of green and blue. The sea and trees surrounding the project will also provide a beautiful contrast.
A picture showing an overlook of a volcano that used to be used for mining bitcoin was posted on Instagram. It included a ring placed on top of the volcano’s steps. The image was captioned with “Night’s eye view of Bukele.” This city, which is almost fantastical, was illuminated by the volcano that overlooks it.
El Salvador Buys the Dip
This week, El Salvador added 500 Bitcoin to its reserves, equivalent to over $71 million. This country’s purchase of digital currency came during a period of a significant decline in the market for cryptocurrencies.
In January, El Salvador’s Congress approved 20 bills that provided the country’s government with legal certainty regarding issuing bonds using Bitcoin. The country’s first bond, which was issued in November last year, aimed to raise $1 billion.
Half of the funds would be used to purchase more Bitcoin, while the country would use the other half to fund the construction of Bitcoin City. The country’s first bond will pay a 6.5% yield. It will also allow investors to fast-track their citizenship.
The recent buying spree in Bitcoin was triggered by the price of the digital currency falling by more than 50 percent from the all-time-high year. When the country made the purchase, Bitcoin was trading at about $30,000.
Choosing to Remain Positive
El Salvador is clearly choosing to remain positive despite the tumbling crypto market that has seen its market cap hit $1.46 trillion. The value is way low compared to its $3 trillion all-time high.
The tech sector is under pressure due to investors’ growing concerns about the war in Ukraine, the rising interest rates in the US, and the potential impact of the Covid lockdowns in China. These factors have prompted many investors to sell their shares in the market.
The decline in crypto follows a drop in US stocks and other markets. The correlation between the tech-heavy Nasdaq and Bitcoin reached its highest point, according to an analytics firm, Kaiko. However, due to the volatility of cryptocurrencies, it is difficult to predict where the market will go next. In 2021, for instance, Bitcoin briefly fell below $30,000 before surging back to its all-time high.
Despite the lackluster prices in 2022, some companies in the cryptocurrency industry are still working toward satisfying the demands of regulators. In May, Binance, one of the biggest platforms in cryptocurrency trading, received approval from the AMF in France to operate. The SEC also announced that it is adding more staff members to its efforts to monitor cryptocurrencies.