El Salvador buys bitcoin on the dip as Shiba Inu soars to top 10 crypto

·3 min read
A sign reading
A sign reading 'bitcoin accepted here' is seen at a store where the cryptocurrency is accepted as a payment method in San Salvador, El Salvador. Photo: Reuters

Bitcoin ticked up on Thursday morning, hovering above a key level of $60,000 ($43,369), as El Salvador’s president announced on Twitter the country bought the dip and acquired bitcoin.

Meanwhile joke token Shiba Inu’s market capitalisation briefly surpassed that of rival meme token dogecoin (DOGE-USD), joining the ranks of the world’s top 10 cryptocurrencies by market cap.

Bitcoin (BTC-USD) was up 2.5%, trading at $60,530.

Shiba Inu (SHIB-USD) soared 20% to trade at $0.000065. At the time of writing this put its market cap at about $38.5bn.

Bitcoin hit a new all-time high of close to $67,000 last week, boosted by the launch of the first ever bitcoin exchange traded fund (ETF). But earlier this week its price came crashing down.

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Analysts told Yahoo Finance UK a 5% to 10% correction is "quite normal" when prices have already escalated more than 55% in a month.

One investor not spooked by the price crash was the president of El Salvador, Nayib Bukele, who made bitcoin legal tender in his country last month, despite protests from many citizens.

He tweeted that he had bought 420 bitcoins — a meme number associated with cannabis culture. This takes the country’s total to 1120 bitcoin.

Not long after the announcement, he was already boasting about the returns on his investment.

"Despite posting more than $11m in losses, BTC’s rise to a new all-time high has El Salvador’s wallet in the green with about $5m in profits even after Bitcoin’s recent plunge below $60K," said Crypto Potato.

Chief market analyst at AvaTrade, Naeem Aslam, believes that “any drop in prices should only be seen as an opportunity to bag some digital coins at bargain prices.”

"Buying the dip has been the primary objective for most day traders, as well as long-term buyers in the financial markets as it provides a unique window to average your purchasing costs, effectively maximising the notional gain on the investment," said Kunal Sawhney, CEO of Kalkine Group.

"As far as accumulating bitcoins is concerned, the interest has widely spiralled after the launch of bitcoin ETF, a considerable correction on the back of any regulatory or market tightening encourages the stakeholders to add more. With the gradually increasing interest of institutional investors, as well as countries, the crypto-asset is likely to remain in a phase of making and breaking new record highs in the term."

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He also said that Shiba Inu overtaking dogecoin "clearly indicates the bifurcated inclination of investors in various crypto-assets formulated on different mechanisms".

"The emerging cryptocurrencies are expected to see such actions as the underlying systems optimise by the time, allowing a wider participation of investor," he said. 

"Irrespective of the influx of new digital currencies, bitcoin is likely to spearhead the gains when it comes to accumulating the so-called vibrant cryptos."

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