President Nayib Bukele released a model of Bitcoin City after the revelation that the Bitcoin nation-state of El Salvador had purchased the dip.
Building the Bitcoin City
Several images released today depict the golden metropolis with Bitcoin as its focal point. “Bitcoin City is coming along brilliantly,” writes Bukele in the description.
Bitcoin is in free fall, with its price dropping to its lowest level since July 2021 in the last week. The cryptocurrency is currently priced at $31,569, down 17% from the previous week.
Bitcoin City will be constructed near La Unión, a small Salvadoran city, according to local press. Income, payroll, property, capital gains, municipal taxes, and CO2 emissions will be zero.
Bukele included many photos of various landmarks in Bitcoin City in his article. It includes one that appears to be a large bitcoin. He went on to say that the project will not be perfect. Despite the architect’s color choices, Bitcoin City will be predominantly green and blue. The sea and trees that surround the project will create a lovely contrast.
Instagram users shared a photo of an overlook of a volcano that was once utilized for bitcoin mining. A ring was erected on top of the volcano’s stairs as part of the plan. The image was titled “Night’s eye view of Bukele”. The volcano that towers over the city provided illumination to this nearly magical metropolis.
Buying the Dip
El Salvador added 500 Bitcoin to its reserves this week, worth more than $71 million. The purchase of digital currency by this country occurred amid a moment of considerable downturn in the cryptocurrency market.
El Salvador’s Congress passed 20 legislations in January that gave the government legal certainty when it came to issuing bonds with Bitcoin. The country’s first bond, issued in November of last year, has a $1 billion target.
The money would be split in half and used to buy additional Bitcoin. At the same time, the country would utilize the remaining half to help build Bitcoin City. The yield on the country’s first bond will be 6.5 percent. It will also help investors to obtain citizenship more quickly.
The recent Bitcoin buying frenzy was sparked by the digital currency’s price plummeting by more than 50% from its all-time high last year. Bitcoin was going for around $30,000 when the country made the acquisition.
Despite the plummeting crypto industry, which has seen its market valuation surpass $1.46 trillion, El Salvador has chosen to remain optimistic. In comparison to its all-time high of $3 trillion, the value is extremely low.
Investors’ concerns about the situation in Ukraine are putting pressure on the tech sector. It also takes into account rising interest rates in the United States and the probable impact of China’s Covid lockdowns. Many investors have sold their stocks as a result of these circumstances.
Crypto’s collapse coincides with a dip in US stocks and other markets. According to Kaiko, the correlation between the tech-heavy Nasdaq and Bitcoin has hit its highest point. However, due to the volatility of cryptocurrencies, predicting where the market will move next is challenging. Bitcoin, for example, temporarily dipped below $30,000 in 2021 before soaring back to its all-time high.
Despite the low costs in 2022, several cryptocurrency companies are still attempting to meet authorities’ needs. The AMF in France granted Binance, one of the largest cryptocurrency trading platforms, permission to operate in May. The SEC also announced that it is beefing up its efforts to oversee cryptocurrencies by hiring more employees.