El Salvador purchases $21M bitcoin as it becomes a legal currency but its value immediately plunged

El Salvador has become the first-ever country to adopt bitcoin as a legal tender and subsequently bought almost $21 million worth of the decentralized digital currency. The country’s president, Nayib Bukele, personally announced they have purchased 400 bitcoins that is equivalent to the said amount.

The purchase is El Salvador’s first step as it pushes to include bitcoin in its balance sheet as legitimate money. The leader shared the information just a day before his country formally took on cryptocurrency as a form of legal money.

The president revealed about their purchase of bitcoin through social media in a series of two tweets. “Our brokers will be buying a lot more as the deadline approaches,” one of his tweets reads.

According to CNBC, the price of bitcoin increased after his tweets were posted and trading was at $52,681.85 by the early morning of Tuesday this week. It should be noted that El Salvador passed the law on bitcoin in June and it only took effect this week and now cryptocurrency is an accepted money that will work with the U.S. dollar in the region.

At this point, the world is observing how this experiment will play out and perhaps, more countries will get into bitcoin if it is proven to be efficient and useful. In any case, El Salvador’s move to accept bitcoin is a major milestone for crypto although it is still receiving criticisms from experts across the country.

It was disclosed that almost 70% of the citizens are not in favor of their country’s decision to make bitcoin legal. The survey was organized by the Central American University and many are also uncertain since many do not know how to use digital currency. On the other hand, the government is said to be hoping that bitcoin would boost financial inclusion in the country as more than half of its people do not have access to traditional financial services.

Meanwhile, although prices of bitcoin rose after El Salvador made it legal, the prices plummeted just after it purchased $21 million bitcoins. Fortune reported that cryptocurrency tumbled 11% as soon as the nation made the announcement. The price dropped from more than over $52,000 to $45,279.48 today and at one point, it was even less at $43,351.