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El Salvador swaps Bitcoin for rapidly appreciating gold
El Salvador, which legalized Bitcoin in 2021, has traded the struggling cryptocurrency for soaring gold.
On September 4, the country’s central bank announced the purchase of 13,999 ounces of the precious metal worth around $50 million. Currently, the state holds 58,105 ounces of gold valued at $207 million. Since the beginning of the year, XAU has risen by 35.55%, reaching a new peak of $3,579 on September 3. Nevertheless, El Salvador’s central bank was not afraid to buy gold at such a high price — the first such purchase since 1990.
Meanwhile, Bitcoin — up 19.51% since the start of the year — has been stagnant. Since August 14, when BTC reached an all-time high of $124,517, its price has been gradually declining and now stands at $112,216. Many investors are hoping for a dump to buy at the bottom, but a crash may never happen, and the cryptocurrency could retain its status as a “boring” asset.
Recently, Salvadoran officials distributed the state-owned 6,274 BTC worth $698.88 million across 14 crypto wallets, explaining the move as a measure to improve security and reduce the risk of theft via quantum computers. However, analyst Jacob Kindge believes the government transferred the bitcoins into multiple storage facilities for their subsequent sale. If this hypothesis proves correct, the authorities may reinvest the proceeds into gold.
See also: "Blockchain prediction platform Polymarket receives permission to operate in the U.S."
