Bitcoin advocate El Salvador ‘buys the dip’ as China fears spark crypto sell-off

Bitcoin bulls may need more than the support of a modestly-sized South American nation to drive a rally after weekend weakness, nevertheless, El Salvador has ‘bought the dip’, according to its presidents Twitter account.

Nayib Bukele confirmed via social media that El Salvador – which this month became the first country to formally adopt crypto as tender – had increased its stake, whilst market data indicates it bought 150 Bitcoins, worth around US$6.8mln.

It is the latest reported Bitcoin transaction by El Salvador which has in recent years spent around US$400mln per annum buying US dollars (which have been widely circulated as tender in the country since 2001).

Crypto markets were awoken with a jolt in Mondays early hours after a prior week of sleepy consolidation.

Bitcoin dropped 6.5% to trade at US$45,049 on Monday morning, having earlier seen a low of US$44,659.

Ethereum meanwhile shed 9% to US$3,132 and Cardano gave up 10.3% to US$2.13, whilst XRP and Solana fell 10.5% and 13% to US$0.9637 and US$140.34 respectively.

The spike in volatility comes as fear spreads surrounding the wider global impacts of the Evergrande crisis in China.

Evergrande, a debt-crippled real estate firm in China, is seen to be teetering on the brink of collapse triggering broader economic anxiety over a ‘disorderly failure’ of the group which owes over US$300bn to institutions.

It comes at the same time as China has in recent months continued to pressurise crypto activities, as well as pinch other corporate arenas, including the ban on crypto mining which sparked a sharp sell-off in digital assets back in May.