Originally published 2021-09-22.
On 20 September 2021, El Salvador's president Nayib Bukele announced on Twitter that his government had bought another 150 bitcoin while the price was sliding, lifting the state's total to 700 coins. At the prices of that week, roughly $43,000 to $45,000 per coin, the whole stash was worth around $30 million.
The purchase came less than two weeks after El Salvador became the first country in the world to make bitcoin legal tender. Below is what was bought and when, why the government said it was doing this, what critics warned about, and how the experiment looked once the dust settled a few years later.
The "buy the dip" announcement
Bukele has always run much of his government's communication through social media, and this announcement was no exception. His short post celebrated the timing of the purchase as much as the purchase itself:
We just bought the dip.
— Nayib Bukele 🇸🇻 (@nayibbukele) September 20, 2021
150 new coins!
El Salvador now holds 700 coins.#Bitcoin🇸🇻
In a follow-up message he framed the move as investment advice from a head of state, telling followers that buying during falls was the way to win. The phrase "buy the dip" comes from trading culture: it means purchasing an asset after its price has dropped, on the bet that it will recover.
The crypto news site Bitcoin.com reported that bitcoin had been trading near $45,000 when Bukele posted and had slipped to about $43,300 a few hours later. The same report quoted Bukele as saying that about 1.1 million Salvadorans were already using the government's new digital wallet.
How El Salvador built up 700 coins in two weeks
The buying spree started on the eve of the new law. On 6 September 2021 the government bought its first 400 bitcoin, worth about $20.9 million at the time. More purchases followed during the launch itself, and by 7 September the total had reached 550. The 150 coins bought on 20 September brought it to 700.
The timeline of the law itself is short:
- 9 June 2021: the Legislative Assembly passed the Bitcoin Law, with 62 of 84 deputies voting in favour.
- 7 September 2021: the law took effect. Bitcoin became legal tender alongside the US dollar, which El Salvador has used as its currency since 2001, and businesses were required to accept it.
- Launch day: the state wallet, Chivo, went live with a $30 bitcoin bonus for every citizen who signed up. It struggled with server problems in its first hours, and bitcoin's price fell sharply the same day.
Between September 2021 and January 2022, the government is reported to have spent around $85.5 million on bitcoin, and further "dip" purchases were announced on Twitter in October, November and December.
Why the government said bitcoin made sense
Bukele's case rested on two arguments.
Remittances
Money sent home by Salvadorans working abroad, most of them in the United States, is a lifeline for the economy. In 2020 those transfers equalled about 23% of the country's GDP. The government argued that a free state wallet could let families receive money without paying commission to transfer companies.
Claims at the time that fees ate "up to 20%" of each transfer describe the worst cases rather than the norm. The World Bank, which tracks remittance prices worldwide, puts the global average cost at a little over 6% of the amount sent. That is still a real burden for poor households, but the savings from switching were never likely to reach the "billions a year" that some supporters suggested.
Price growth and investment
The second argument was that bitcoin might keep rising in value, turning the national holdings into a profit and attracting crypto businesses and tourists. Bukele later promoted a tax-friendly "Bitcoin City" planned at the foot of the Conchagua volcano, to be powered by geothermal energy.
Infrastructure grew quickly. Crypto ATM trackers counted about 205 machines in El Salvador that September, which put the small country third in the world behind the United States and Canada.
The warnings from economists and the IMF
Critics raised concerns from the start, and most of them were about risk rather than ideology:
- Volatility. A currency whose value can swing 10% in a day is hard to use for wages, savings or public budgets.
- Public finances. Putting taxpayers' money into a speculative asset exposes a heavily indebted state to losses. When Bitcoin City was announced, El Salvador's international bonds were already falling, and they lost about 30% of their value in December 2021.
- Money laundering and oversight. Anti-corruption groups worried that the openness of crypto payments could be abused in a country with serious problems with gangs and organised crime.
- Public consent. A survey in September 2021 found that 68% of Salvadorans disagreed with adopting bitcoin and nine in ten did not clearly understand it.
In January 2022 the International Monetary Fund urged El Salvador to drop bitcoin's legal-tender status, citing financial stability and consumer protection, and signalled that this stood in the way of a planned loan.
Did buying the dip pay off?
In the short term, no. Bitcoin's price kept sliding after September, and by January 2022 it was roughly 45% below its peak. By mid-2022 the coins the government had bought were worth about half of what it had paid. In September 2023 reports put the paper loss at around $45 million.
Then the market turned. In December 2023 the holdings were valued slightly above their purchase cost, and when bitcoin reached a new record above $69,000 in March 2024, the stash showed a paper gain of about 50%. Both sides of the debate have since cited the same numbers as proof they were right: supporters point to the profit, critics point out that a national treasury should not depend on timing a speculative market.
Everyday use is easier to judge. Polls by the University of Central America's public-opinion institute found the share of people using bitcoin for transactions dropped from about 26% in 2021 to around 8% in 2024. Only about 1–2% of remittances were sent in crypto.
Bitcoin's status after the 2025 changes
To secure a $1.4 billion loan agreed with the IMF in December 2024, El Salvador amended its Bitcoin Law in January 2025. Accepting bitcoin became voluntary for businesses, taxes and government fees can no longer be paid in it, and the state agreed to wind down the Chivo wallet. Bitcoin is no longer compulsory legal tender in El Salvador.
The September 2021 announcement therefore marks the high-energy start of an experiment that was later scaled back. It remains a useful case study for anyone weighing claims about national crypto adoption: look at who actually uses the currency, what it costs taxpayers, and what happens when the market falls.
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Sources: Bitcoin.com, 20 September 2021; Nayib Bukele on X; Wikipedia: Bitcoin in El Salvador; World Bank: Remittance Prices Worldwide; Cointelegraph: El Salvador amends Bitcoin law (2025).
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