Bukele: 'Buy the Dip!' (With a Country's Treasury)

In September 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender. President Nayib Bukele personally managed the country's BTC purchases and tweeted about them in real time. "Just bought the dip," he posted at 3am, announcing another purchase of 150 BTC.

The spectacle was unprecedented. A head of state was buying a volatile cryptocurrency with his country's reserves and live-tweeting the trades. Crypto Twitter loved it. Economists were horrified. The IMF warned that using Bitcoin as legal tender posed significant risks to financial stability and threatened to withhold lending.

Bukele was buying at an average price that initially looked terrible. He bought in the $30,000-$60,000 range, and Bitcoin crashed to $15,000 in 2022. El Salvador's BTC portfolio was 60% underwater. The World Bank refused to help implement the Bitcoin system. Opposition politicians called it the worst sovereign investment in modern history.

Then Bitcoin recovered. By late 2024, BTC passed $100,000 and El Salvador's holdings were significantly profitable. Bukele tweeted again, this time vindicated. The "buy the dip" president looked like a genius, at least on paper.

The IMF eventually reached a $1.4 billion deal with El Salvador in late 2024, but required the country to scale back its Bitcoin ambitions - making the Bitcoin wallet voluntary for businesses and pulling back government involvement. Bukele agreed, having already won the PR war.

Whether El Salvador's Bitcoin experiment was visionary or reckless depends entirely on the time horizon. In 2022, it looked insane. In 2024, it looked prescient. The verdict keeps changing with the price, which is either the point or the problem.