Flagship cryptocurrency Bitcoin rallied strongly yesterday and many analysts believe this is a result of El Salvador’s adoption of Bitcoin as a legal tender on the 7th of September. There is a growing movement on social media, calling for people to buy small amounts of Bitcoin in support of El Salvador’s plan to make the token legal tender.
Users on platforms including Twitter and Reddit are discussing plans to buy $30 worth of Bitcoin collectively on the 7th of September to mark El Salvador’s Bitcoin law coming into effect. This call is similar to a coordinated price pump that has happened with meme stocks like GameStop Corp and AMC.
The country has been preparing heavily for the adoption of Bitcoin as it has been installing Bitcoin ATMs to allow citizens to convert the token into U.S. dollars and last week, El Salvador’s Legislative Assembly passed legislation to allow for the creation of a $150 million dollar Bitcoin Trust to back conversions of Bitcoin to U.S. dollars.
The government, as a way to promote the use of Bitcoin, mentioned that it will give the adult population of El Salvador $30 in Bitcoin once they download the government issued wallet known as “Chivo.” This means Salvadorans will be able to download Chivo, enter their ID number and receive $30 in Bitcoin for free. This was confirmed by Finance Minister Alejandro Zelaya last month.
Asides from the adoption by Salvadorans, on-chain analytics suggests that Bitcoin is in high demand. Data from Glassnode reveals that the number of BTC that left centralized exchanges last month amounted to 124,501 BTC (approximately $6 billion). Glassnode’s weekly On-chain Exchange flow revealed that last week, a total of $1.4 billion left centralized exchanges. To top it up, a chart posted by William Clemente, an on-chain analytics expert who is the lead insights analyst for blockwareintelligence, revealed that whales (a term used to describe big-money investors) added 41,580 BTC ($2.2 billion) to their holdings in the last 10 days.
What they are saying
On the calls for buying $30 worth of BTC on the 7th of September, Ijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore stated that it will be a challenge for users to actually coordinate and act out such a plan. He said, “Saying something and actually doing it are very different.”
Bitcoin has been on a strong run of late, surging to almost $52,000 on Monday to touch the highest level since May. This comes amid a broader revival in the crypto sector from a rout earlier this year. BTC is currently trading at $51,800 as of the time of this report.