Bitcoinland

As of today, Bitcoin is legal tender in El Salvador. The Latin American country with a population of about 6.5 million people is the first nation in the world to adopt the cryptocurrency as an official form of payment for goods and services. El Salvador has used the U.S. dollar as its official currency since 2001.

Citizens who download the government's official wallet will get $30 in Bitcoin deposited in their account. But the volatile cryptocurrency lived up to its reputation today, getting El Salvador's adoption off to an inauspicious start: The price of Bitcoin dropped as much as 17% today, to about $43,000. It has gone from around $10,000 two years ago to record highs near $64,000 in April 2021.

Here's Barron's Jack Denton writing today:

The country’s president, Nayib Bukele, said on Twitter Monday that El Salvador held 400 Bitcoins, after purchasing 200 more ahead of adopting it as legal tender. That brings the value of the country’s crypto treasury to more than $20 million at current prices.

El Salvadorans will be able to buy land with Bitcoin as well as pay their taxes, though tax liabilities are set in U.S. dollar terms. Bukele has said the move will also save El Salvadorans hundreds of millions of dollars in fees from money sent back to the country in U.S. dollars each year, as remittances in Bitcoin would carry lower costs.

Bukele later tweeted that El Salvador's treasury had taken advantage of today's decline and purchased more Bitcoins. "Buying the dip 😉. 150 new coins added," the president tweeted.

That ended up being a good call, from a very short term trading perspective: The Bitcoin price was back around $47,000 by this evening.

As for the long-term success or failure of El Salvador's Bitcoin experiment, that's anyone's guess at this point. 

Barron’s Daren Fonda has more on the latest Bitcoin action here.