What happens to $BTC when El Salvador sells their Bitcoin?

[pooya87]

El Salvador is a small, very poor country (average monthly income = $365).

El Salvador is a rather poor country but the average monthly income alone is not the indicator of it. Not to mention that you should compare that with the cost of living which is about 600 bucks if I am not mistaken.

BTW according to statista the national average monthly income stood at a mean value of 700.94 USD.

And they are a democracy.

That doesn't mean they are going to make stupid decisions that some kids are thinking on the internet.

but I would reckon the psychological effects would be pretty huge.

Whatever the size of the impact, it will be short.

[stadus]

El Salvador will continue to buy Bitcoin, and it might not have a big impact on the market if they sell it in the future, but they aren’t relying heavily on that outcome. What they really want is for their country to gain popularity in the crypto world, and they’ve succeeded in doing so. They expect investors to come in because they’re generally crypto-friendly, and I believe that was their goal from the very start.

As for their finances, I think they’ve managed them well. They’ve increased their revenue collections over the past few years, which shows they’re handling their economic affairs effectively.

https://tradingeconomics.com/el-salvador/government-revenues

Government Revenues in El Salvador increased to 7065.80 USD Million in 2023 from 6650.90 USD Million in 2022. Government Revenues in El Salvador averaged 2953.59 USD Million from 1990 until 2023, reaching an all time high of 7065.80 USD Million in 2023 and a record low of 583.80 USD Million in 1990. source: Central Reserve Bank of El Salvador

[legiteum]

Bhutan is one of the countries that holds more bitcoin than El Salvador and they have sold bitcoin several times this year but do you see anyone interested or do many people know?

Nope. Nobody talks about them either. El Salvador, on the other hand, has a very big brand name when it comes to Bitcoin. Them selling would be a much much bigger deal.

I would say if Trump cancel the idea of Bitcoin reserve in the US, the impact would be much bigger than El Salvador sold all of their coins.

Trump could absolutely devastate the price of Bitcoin with even the slightest gesture. 2024 with the year the Bitcoin community connected Bitcoin's future to Trump.

But rest assured, his recent moves show that he is serious about bitcoin and the idea of ​​making the United States the crypto hub of the world.

Trump is serious about Trump. If you believe anything else, you obviously don't know anything about Trump.

Trump has been repeatedly saying that crypto should be "made in the USA", which Bitcoin is most emphatically not since it is independent of any single country. This could be nothing, or it could be him laying the groundwork to promoting his own coin over Bitcoin, which could easily make him a trillionaire.

El Salvador will continue to buy Bitcoin, [...]

How can you be certain of that? The president there could be deposed tomorrow, and then the new president could reverse everything. Or Bitcoin could dip in price, which would trigger a rebellion there.

You see, by doing all of this, you have place the fate of Bitcoin at the mercy of democratic politics...

[Cryptomultiplier]

So far, I don't think that there would be much impact in the cryptocurrency market, if El Salvador as a pro Bitcoin country were to sell their current BTC holdings. There might be likely short term volatility experienced, but am sure it is not going to have a strong enough effect on the current price of BTC.
 
El Salvador turned to BTC to help strengthen its economy so with its current holdings which is not more than about 6000units of the total BTC, am sure potential buyers would rush in and the government of El Salvador would likely absorb the profit from BTC sales into its coffers rather than to its citizens.

[Outhue]

Has anybody thought of this?

El Salvador is a small, very poor country (average monthly income = $365). And they are a democracy. If you are an average citizen of El Salvador, you are probably thinking about the nice things you could get if your government sold all of that BTC at a huge profit (and yes, math: this isn't enough to make everybody there rich or something, but again, this country is a democracy, so...).

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

Of course you could argue that they would want to keep their BTC as an investment, given how much money they have already made on it, but why not invest in some other digital currency that has potential gains of 10x more? In other words, what if El Salvador is gripped by... mass-FOMO  .

Something to think about...

Very poor country because their average monthly income is $365? Well I am ready to shock you, the average monthly income in my country is $30+ and yes we have more population than EL Salvador, to me Salvador is richer than many countries out there including mine.

Thinking that if one is a citizen of El Salvador they should be expecting everyone to be rich because they got Bitcoin makes no sense, people need to understand that we can't all be rich in a country, it will ruin the country's currency and inflation will increase massively, to keep balance some people will have to be poor while some or even few will be rich.

Other crypto coins are way too risky for a country try to depend on it, that is why Bitcoin is the only reliable one, a country will collapse if they depend on a wrong crypto asset, Bitcoin is the true decentralized one and nothing else comes close to it.

[rodskee]

Has anybody thought of this?

El Salvador is a small, very poor country (average monthly income = $365). And they are a democracy. If you are an average citizen of El Salvador, you are probably thinking about the nice things you could get if your government sold all of that BTC at a huge profit (and yes, math: this isn't enough to make everybody there rich or something, but again, this country is a democracy, so...).

if their government sells bitcoin, no one’s going to be thinking what “something nice” they could have for themselves. the money the government will get will not be directly distributed to their citizens. it would be used for projects which isn’t even 100% certain to be successful but at least they have the funds to start with

but why not invest in some other digital currency that has potential gains of 10x more?

because it’s too risky that’s it they can’t afford to try and lose even just a little bit of money because that’s not the government’s money that’s from the taxpayers

[FortuneFollower]

El Salvador should sell bitcoin and buy altcoins. So that the market will react and the price of bitcoin may fall for a day or two. I am not interested to discuss about if El Salvador selling bitcoin than to let you know, that will not stop bitcoin to get to all-time high.

About buying altcoins, the country is not gambling but investing on good assets. Not pump and dump coins.

As it was said - nothing would be happening with BTC in the long term from such a move, and then again - El Salvador is a smart country, they wouldn't dump it all just due to the FOMO clutching in.
If they understood Bitcoin, it wouldn't happen, only in case of a very big emergency, maybe.

[acroman08]

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

to who? I am curious why do you think El Salvador selling their BTC would have a huge psychological effect? Is it because they are a country? anyway, Personally, while it could have a psychological effect on some people I doubt it'll be significant because I feel like they don't have enough influence in the crypto community to have that much effect on people.

[Lucius]

If we only take into account the psychological effect of the possible sale of a relatively small amount of BTC that ES has, I don't think it would have too much impact on the price, especially if it happened in the middle of a bull run. It is true that many think that the ES is special because it passed a law declaring BTC as legal tender, but it is also true that the idea has not quite developed (so far) as it was intended.

So we have a country where maybe only 10-15% of people use BTC in some way, and a country that has so far bought about 6000 BTC worth a total of about $600+ million - while at the same time its debts amount to about $24 billion, and the poverty rate has increased even more in recent years and amounts to over 30%.

Still, who says Bukele doesn't care about his people? At least for those who can afford pets...

https://elsalvadorinenglish.com/2022/02/23/president-nayib-bukele-announced-the-inauguration-of-the-first-veterinary-hospital-in-el-salvador-chivo-pets/

[fikrett]

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

to who? I am curious why do you think El Salvador selling their BTC would have a huge psychological effect? Is it because they are a country? anyway, Personally, while it could have a psychological effect on some people I doubt it'll be significant because I feel like they don't have enough influence in the crypto community to have that much effect on people.

The market wouldn't feel it the way OP thinks, in my opinion.
It would create some fuzz for sure, but nothing would spur of it afterward.

[CageMabok]

As it was said - nothing would be happening with BTC in the long term from such a move, and then again - El Salvador is a smart country, they wouldn't dump it all just due to the FOMO clutching in.
If they understood Bitcoin, it wouldn't happen, only in case of a very big emergency, maybe.

From what you said it is actually quite clear that a country that already believes in Bitcoin and already thinks that Bitcoin can be an important asset for them, of course they will not just throw it away if El Salvador can still solve its problems with something else like fiat. Because parties or countries that already believe in Bitcoin will not hesitate to throw away their paper by buying Bitcoin and holding Bitcoin for the long term so that every thing that needs to be fixed will be tried with something else without sacrificing the Bitcoin they already hold.

[michellee]

No, I don't think about that because I am doubt El Salvador will sell some portion now reminds the Bitcoin price will increase high  anytime. They will still hold for their future and if necessary they will buy more Bitcoin from their reserve.

Maybe that can make the price is down for a little or a big but Bitcoin will increase in the right time. And it is normal if we may see a decrease coming after they sell their Bitcoin but you should not worry because that will be a correction happen after the rise.
But if El Salvador decide to sell their Bitcoin,  we should not complaint because that is their decision. We can only wait for what happen to the market after that.

[avp2306]

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

to who? I am curious why do you think El Salvador selling their BTC would have a huge psychological effect? Is it because they are a country? anyway, Personally, while it could have a psychological effect on some people I doubt it'll be significant because I feel like they don't have enough influence in the crypto community to have that much effect on people.

I guess to those people following them. El Salvador is somehow bring a lot of good discussion about their adaption for Bitcoin and if there's sudden changes of decision then they decide to sell provably that it will have psychological effect to some people especially if the media will sensualize the situation then create or add more scare to people. There's huge chance that a dump would follow after those unfortunate decision they made.

But I really guess selling all their Bitcoin will not happening for now since it looks like El Salvador government still hungry to accumulate more.

[fikrett]

No, I don't think about that because I am doubt El Salvador will sell some portion now reminds the Bitcoin price will increase high  anytime. They will still hold for their future and if necessary they will buy more Bitcoin from their reserve.

Maybe that can make the price is down for a little or a big but Bitcoin will increase in the right time. And it is normal if we may see a decrease coming after they sell their Bitcoin but you should not worry because that will be a correction happen after the rise.
But if El Salvador decide to sell their Bitcoin,  we should not complaint because that is their decision. We can only wait for what happen to the market after that.

The market wouldn't flinch a bit, I will tell you that.
Somebody already said that Germany's gov sold more BTC than El Sal holds, yet nothing bad happened in the long run.
And I stick to that thought too.

[stadus]

How can you be certain of that? The president there could be deposed tomorrow, and then the new president could reverse everything. Or Bitcoin could dip in price, which would trigger a rebellion there.

You see, by doing all of this, you have place the fate of Bitcoin at the mercy of democratic politics...

Even if they decide to dump everything, it won’t have a significant impact on the market. If it does, it’ll probably just be temporary. Their holdings haven’t even reached $1 billion yet, and they’re accumulating Bitcoin slowly, buying just 1 BTC per day. That’s nowhere near enough to cause any major market movement.

[hero_the_bossman]

How can you be certain of that? The president there could be deposed tomorrow, and then the new president could reverse everything. Or Bitcoin could dip in price, which would trigger a rebellion there.

You see, by doing all of this, you have place the fate of Bitcoin at the mercy of democratic politics...

Even if they decide to dump everything, it won’t have a significant impact on the market. If it does, it’ll probably just be temporary. Their holdings haven’t even reached $1 billion yet, and they’re accumulating Bitcoin slowly, buying just 1 BTC per day. That’s nowhere near enough to cause any major market movement.

It may an interesting news to read through though - especially for those who are ignorant of BTC.
Imagine: "A country sells off all of its BTC and gets X because it needed to do so".
Truly, that's all it would do to BTC - a bit of a ramble .

[stadus]

It may an interesting news to read through though - especially for those who are ignorant of BTC.
Imagine: "A country sells off all of its BTC and gets X because it needed to do so".
Truly, that's all it would do to BTC - a bit of a ramble .

The news might actually have a bigger impact than the actual selling because the market has grown significantly. My argument is backed by data, and as of now, the market has a 24-hour trading volume of over $67 billion. This shows that the market is ready enough to absorb such moves without major disruptions.

you can see the full details in here https://www.tradingview.com/symbols/BTCUSD/

[acroman08]

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

to who? I am curious why do you think El Salvador selling their BTC would have a huge psychological effect? Is it because they are a country? anyway, Personally, while it could have a psychological effect on some people I doubt it'll be significant because I feel like they don't have enough influence in the crypto community to have that much effect on people.

I guess to those people following them. El Salvador is somehow bring a lot of good discussion about their adaption for Bitcoin and if there's sudden changes of decision then they decide to sell provably that it will have psychological effect to some people especially if the media will sensualize the situation then create or add more scare to people. There's huge chance that a dump would follow after those unfortunate decision they made.

But I really guess selling all their Bitcoin will not happening for now since it looks like El Salvador government still hungry to accumulate more.

that is if people will bite it. As I said, El Salvador doesn't really have enough influence in the crypto community. if they sell their BTC people will probably treat it just like any other company that has sold their BTC in the past which created some discussion in the community but nothing significant really happened after.

[m2017]

El Salvador is a small, very poor country (average monthly income = $365). And they are a democracy. If you are an average citizen of El Salvador, you are probably thinking about the nice things you could get if your government sold all of that BTC at a huge profit (and yes, math: this isn't enough to make everybody there rich or something, but again, this country is a democracy, so...).

You are right. The people of El Salvador, seeing the jump in bitcoin, may demand that the government sell bitcoins. And these people, given their poverty, may demand that they be given a share of this profit.

I know El Salvador doesn't have a large percentage of the total Bitcoin supply, and them dumping it would only be a small bump on the market for a day or two, but I would reckon the psychological effects would be pretty huge.

Well, why not. El Salvador has quite a few bitcoins. If start selling them at once, will undoubtedly see a noticeable impact on the bitcoin's price.

Psychological effect for whom? For China and the US? Do you think they will follow the same example? I doubt it. This effect will only affect ordinary BTC-holders, who react extremely panicky "sensitively" to any changes.

Of course you could argue that they would want to keep their BTC as an investment, given how much money they have already made on it, but why not invest in some other digital currency that has potential gains of 10x more? In other words, what if El Salvador is gripped by... mass-FOMO  .

Did they earn? This profit is only imaginary at the moment, because it is not converted into world-traded currencies (traditional).

Other coins are much riskier, on which you can "bet" $100, but not $100 million.

Something to think about...

But certainly not about El Salvador. Let's leave the thoughts about their pressing problems to them.

[fuguebtc]

Germany sold over 50kBTC and Mt.gox distributed over 142kBTC to the market this year but bitcoin hit $100k in November. Meanwhile, El Salvador only holds 5,933 BTC, a number that is not too large compared to other whales in the market. So them selling bitcoins won't have much impact on the market, IMO.

Psychologically, I get what you mean but from what I observe on social media to bitcoin forums. I don't think El Salvador gets more public attention than organizations that hold larger amounts of bitcoin. What El Salvador has done is admirable and commendable but they are just investors in the market and with the amount of bitcoin they hold, they cannot expect to have significant influence or a big say in the market.