El Salvador buys the dip as Bitcoin price flash crashes to $42.9K

Bitcoin (BTC) holders took profits on Tuesday, just as El Salvador moved to recognize the digital currency as legal tender in a landmark move that could have significant implications for global adoption. 

After hitting local highs north of $52,800 on Monday, Bitcoin’s price plunged all the way to $42,900 in Tuesday trading, according to Cointelegraph Markets Pro. Peak to trough, the flagship cryptocurrency plunged nearly 19% over the previous 24 hours.

Salvadoran President Nayib Bukele confirmed that his government bought the dip by snatching up 150 BTC during the depths of the selloff. As Cointelegraph reported, El Salvador made its first BTC purchase Tuesday on the eve of the Bitcoin Law coming into effect. The initial purchase of 200 BTC was valued at roughly $10.4 million.

https://twitter.com/nayibbukele/status/1435260422110732300?ref_src=twsrc%5Etfw

Less than five minutes after the initial buy-the-dip tweet, Bukele said that the “discount is ending” for Bitcoin. He also thanked the International Monetary Fund, or IMF, for helping his country “save a million in printed paper” on his government’s Bitcoin purchase. For context, the IMF has come out against El Salvador’s Bitcoin foray. Its warnings about El Salvador’s initiative may have contributed to the recent bout of market volatility. 

El Salvador now holds 550 BTC, worth roughly $28.8 million at current prices.

Related: Bank of America outlines 4 potential benefits of El Salvador’s Bitcoin strategy

Volatility is nothing new for the cryptocurrency market. The collective market capialization of all coins was cut in half between May and July as a combination of technical trading, profit-taking and fear-inducing headlines dragged Bitcoin from a high near $65,000 all the way back down to $29,000. The market has staged an impressive recovery over the past month, with Bitcoin reclaiming $50,000, Ether (ETH) hitting $4,000 and the total market cap climbing back above $2.4 trillion.