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

[aoluain]

LOL, for some reason this discussion has brought all of the Bitcoin maxis out of the woodwork. That wasn't my intent   .

Lots of non-Bitcoin digital currencies have outperformed Bitcoin over the last few years--and surely many more will going forward.

Go on then, list them for us Bitcoin maxis?
I find it hard to believe that wile everyone has been focussing on Bitcoin, ETF's
being approved, Trump looking at adding Bitcoin to the Governments reserves etc.
that there is these unknown assets out performing Bitcoin - you gotta tell Saylor,
he's definitely going to want to know.

ETH ETF has also been approved, Saylor is not buying ETH but the giant Blackrock is buying ETH daily along with bitcoin and there is no guarantee that Saylor will not buy ETH in the future. Not to mention other altcoins like XRP, SOL, LINK...Their ETFs will be accepted soon and it's just a matter of time.

Trump is proposing bitcoin as a national reserve strategy but his strategy is to make the US the crypto center of the world. But did you know the Trump family owns an altcoin project called World Liberty Financial?
I list these not to prove that they will outperform bitcoin, I just want to say that bitcoin is not the only valuable thing in the crypto market.

Recently, Trump's project instead of buying Bitcoin, they bought altcoins and if altcoins are useless, why do they buy them?



Source: spotonchain

The bottom line is none of them are decentralised, at best one or two is questionably
decentralised. The only kind of appealing thing is that their price is appealing to those
who think they will be early investors in an asset* which is going to follow Bitcoins
trajectory. For me its a big risk and anyone serious about Bitcoin will have the same view
I would think.

[Samlucky O]

If El Salvador decides to sell off their bitcoin holdings, I don't think anything will happen to bitcoin. Bitcoin Can only experience big decline or correction depending on the amount of bitcoin sold in the arket. If they hold 20 -%30 of the total bitcoin in circulation , and decide to sell in a day, the market will experience a sudden dip but will gradually normalise. There where people who have sold some amount of bitcoin some time ago which made the market to dip and later correct back. So it's not a big deal.

[bbc.reporter]

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...

However, what if El Salvador will not dump their bitcoin and begin encouraging other South American countries to buy bitcoin?

Has anyone thought of this?

They might begin having partnerships with each other and the beginning of this will be in the cryptospace which might later become a political partnership. South America can be a united continent under the banner of bitcoin and the cryptospace.

This is something to think about.

[Smack That Ace]

Remember that this country has considered Bitcoin a legal tender or alternative currency to US dollar, so they didn't buy Buying Bitcoin based on the investment side alone, but also to use it for day-to-day transaction in their country, so thinking about selling or liquidating all their Bitcoin portfolio at once according to Op, seem not very likely,  but they can sell some portion of their holdings.

Is there any data to show that people there are using bitcoin as an alternative currency to USD or is this just our unfounded guess? I also read news about El Salvador but most of the news I see is just about their bitcoin investment. They never provide or mention the progress of using bitcoin as currency in their country and its impact on the economy, it is mostly just baseless speculation by investors about them. If you follow Nayib Bukele, you can see him showing off his bitcoin investment returns every day, no more, no less. With all that said, it's clear that they are just using bitcoin as an investment just like us, legalizing bitcoin as legal tender is just a formality.

[john_egbert]

However, what if El Salvador will not dump their bitcoin and begin encouraging other South American countries to buy bitcoin?

Has anyone thought of this?

They might begin having partnerships with each other and the beginning of this will be in the cryptospace which might later become a political partnership. South America can be a united continent under the banner of bitcoin and the cryptospace.

This is something to think about.

The already do, in fact.
Source.

[Taskford]

Remember that this country has considered Bitcoin a legal tender or alternative currency to US dollar, so they didn't buy Buying Bitcoin based on the investment side alone, but also to use it for day-to-day transaction in their country, so thinking about selling or liquidating all their Bitcoin portfolio at once according to Op, seem not very likely,  but they can sell some portion of their holdings.

Is there any data to show that people there are using bitcoin as an alternative currency to USD or is this just our unfounded guess? I also read news about El Salvador but most of the news I see is just about their bitcoin investment. They never provide or mention the progress of using bitcoin as currency in their country and its impact on the economy, it is mostly just baseless speculation by investors about them. If you follow Nayib Bukele, you can see him showing off his bitcoin investment returns every day, no more, no less. With all that said, it's clear that they are just using bitcoin as an investment just like us, legalizing bitcoin as legal tender is just a formality.

I guess you will see it here https://www.statista.com/topics/8401/bitcoin-in-el-salvador/#topicOverview Click those bolded text since there's hidden links to show those reports presented on that article.

Also see this article https://finance.yahoo.com/news/el-salvador-calls-bitcoin-experiment-235235123.html We could still see that they are still successful for making Bitcoin as their local tender.

Maybe he just do that its because he want to report what he gain from their investment. And I think they are clear with their intention that they really want to invest on Bitcoin. Making it as a currency just like what they did when they are on early phase of their adaption is I think a second priority for using Bitcoin. But it seems everything looks great with them and we can really see that they are actually gaining with their Bitcoin investment.

[Lucius]

However, what if El Salvador will not dump their bitcoin and begin encouraging other South American countries to buy bitcoin?
Has anyone thought of this?
~snip~

Whether ES will keep or dump its BTC is completely irrelevant - what does 6000 BTC mean on a market that has almost 20 million BTC in circulation (mined)? Besides, if these other countries weren't convinced in any way before that BTC could be of any help to them, do you think they would start investing in something this expensive today or tomorrow?

Today you need more than $1 million to buy 10 BTC, how much do you need for 1000 BTC?

[GigaBit]

El Salvador is a small country with a small monthly income, but a lot of remittances are sent to that country. One of the reasons for them before investing in Bitcoin was that if they sent remittances there through Bitcoin, the costs would be reduced. However, it is not possible to speculate at this time whether they are fully enjoying this benefit, but they have become another country in the world that has the legal validity of Bitcoin. The interest they have shown in investing in Bitcoin as a small country has undoubtedly been commendable. Their holdings in Bitcoin are not very large, but they have benefited 100% from the investment they made in adverse conditions.

If they plan to sell Bitcoin, it is completely their own matter, but if they sell, they will not get more of the Bitcoin from which they collected it. Moreover, Bitcoin will increase its target in the future. If they sell now, they will have to sell Bitcoin at a lower price.

I believe that if they sell Bitcoin, it will not have a big effect in terms of volume, but there may be a small reaction in El Salvador, which is now known by many as a Bitcoin enthusiast country, but its effect could have a negative role world wide. However, even if it has a negative role in the short term, it will not have a big effect in the long term because Bitcoin will become more expensive in the future.

[FortuneFollower]

However, what if El Salvador will not dump their bitcoin and begin encouraging other South American countries to buy bitcoin?
Has anyone thought of this?
~snip~

Whether ES will keep or dump its BTC is completely irrelevant - what does 6000 BTC mean on a market that has almost 20 million BTC in circulation (mined)? Besides, if these other countries weren't convinced in any way before that BTC could be of any help to them, do you think they would start investing in something this expensive today or tomorrow?

Today you need more than $1 million to buy 10 BTC, how much do you need for 1000 BTC?

As the future would push in, more and more countries will understand what BTC may bring to them - the bigger price tag for it makes these countries and cities alike reconsider their stance, in my opinion.
Take a look at Vancouver, for example: The City of Vancouver is preparing to become a "Bitcoin-friendly city"
Of course, I do agree with you that not all of the world would become pro-Bitcoin in one swift decade or so - but time makes its magic little by little.

[OcTradism]

Maybe he just do that its because he want to report what he gain from their investment. And I think they are clear with their intention that they really want to invest on Bitcoin. Making it as a currency just like what they did when they are on early phase of their adaption is I think a second priority for using Bitcoin. But it seems everything looks great with them and we can really see that they are actually gaining with their Bitcoin investment.

El Salvador luckily have a President who loves their country and dedicate his adminstration to serve his country and make it better, safer and more prosperous for the nation. El Salvador was known with very high criminal rates but recent years, it turned to be one of safest countries and in Bitcoin adoption, they are a pioneering country for Bitcoin Legal Tender.

Farther than legal tender, they have invested money, national treasury in Bitcoin, and their profit now is very good. Their success actually will motivate more countries doing similarly.
https://nayibtracker.com/

[john_egbert]

Maybe he just do that its because he want to report what he gain from their investment. And I think they are clear with their intention that they really want to invest on Bitcoin. Making it as a currency just like what they did when they are on early phase of their adaption is I think a second priority for using Bitcoin. But it seems everything looks great with them and we can really see that they are actually gaining with their Bitcoin investment.

El Salvador luckily have a President who loves their country and dedicate his adminstration to serve his country and make it better, safer and more prosperous for the nation. El Salvador was known with very high criminal rates but recent years, it turned to be one of safest countries and in Bitcoin adoption, they are a pioneering country for Bitcoin Legal Tender.

Farther than legal tender, they have invested money, national treasury in Bitcoin, and their profit now is very good. Their success actually will motivate more countries doing similarly.
https://nayibtracker.com/

Do you think once their president is gone, they will leave their stance on crypto and BTC the same?

[mirakal]

However, what if El Salvador will not dump their bitcoin and begin encouraging other South American countries to buy bitcoin?
Has anyone thought of this?
~snip~

Whether ES will keep or dump its BTC is completely irrelevant - what does 6000 BTC mean on a market that has almost 20 million BTC in circulation (mined)? Besides, if these other countries weren't convinced in any way before that BTC could be of any help to them, do you think they would start investing in something this expensive today or tomorrow?

Today you need more than $1 million to buy 10 BTC, how much do you need for 1000 BTC?

I have to agree. Those bitcoins stored by El Salvador will be nothing compared to the over all bitcoin in circulation. And for sure, the time will come that they’ll eventually sell bitcoin and use their profits into something else. That’s for certain. However, once they sell, maybe price fluctuations may probably occur but it won’t leave crashing the market. But for now, it’s so unlikely seeing El Salvador selling bitcoin, they could be hoarding more bitcoins instead.

[alastantiger]

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 

Are you asking the El Salvador government to sell their Bitcoin and use the profit to invest into other cryptocurrency, that is not a wise decision for them to take and it's going to be a wrong decision by the government because then they'll be taking on more risk than when they invested into Bitcoin. A decision that they can take and they'll have a valid reason why I'll support them to sell is when the government wants to invest the profits that they have made into other things that'll make the economy of the country to improve. A governments should improve the economical condition of his country hence using money to invest into factory that'll provide job for the citizens is better than just having profits stored up from Bitcoin that isn't being used to better the standard of living of the citizens.

[Japinat]

If El Salvador suddenly decides to sell their bitcoin during this bull run, that couldn't stop the bull run either, but it might leave a short term price decline and after a day or two, btc price might even surge higher than it was. That's always the market pattern after a sell-off.

However, Bukele will probably won't do that knowing the profits won't be enough to sustain their country's economy  with a huge population. There'll wait for more years most likely before they'll end up selling their coins.

[pawanjain]

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...

El Salvador is probably a bitcoin believer and is not there to flip for some altcoin.
Even if they decide to take profits at some point of time, it won't create a negative impact considering their economical state.
Although it might create a temporary dump in bitcoin price but it will recover sooner or later.
Whats more concerning are these corporate companies which hold large amount of bitcoins.
We can't imagine if all of them start selling off their coins.

[tygeade]

El Salvador luckily have a President who loves their country and dedicate his adminstration to serve his country and make it better, safer and more prosperous for the nation. El Salvador was known with very high criminal rates but recent years, it turned to be one of safest countries and in Bitcoin adoption, they are a pioneering country for Bitcoin Legal Tender.

Farther than legal tender, they have invested money, national treasury in Bitcoin, and their profit now is very good. Their success actually will motivate more countries doing similarly.
https://nayibtracker.com/

Do you think once their president is gone, they will leave their stance on crypto and BTC the same?

This is the main question that should be asked. I do not think that Bukele will sell at a ll, he might even put more in, I have absolutely full trust on him to keep all the bitcoins as long as he is in charge and there is no reason for him to sell anyways, they are making more and more money from it and he can convince everyone that keeping it is better.

The real question is, eventually this dude will lose, I have no idea how their elections work, like do they get just two terms like USA? If that's the case, and he already got re-elected, then we can say that he will be out soon, or maybe he is in power for a while longer, but in any case, eventually one day he will lose. And when that happens, I do not think that he is going to end up with getting another friend in power that will keep it. I think it could be someone else and that's the most important part, we could probably see someone else do a different approach and that's the most important part of it.

[RockBell]

If El Salvador decides to sell off their bitcoin holdings, I don't think anything will happen to bitcoin. Bitcoin Can only experience big decline or correction depending on the amount of bitcoin sold in the arket. If they hold 20 -%30 of the total bitcoin in circulation , and decide to sell in a day, the market will experience a sudden dip but will gradually normalise. There where people who have sold some amount of bitcoin some time ago which made the market to dip and later correct back. So it's not a big deal.

If the reason for there selling is open but just like that they start selling it will definitely affect the price of bitcoin, and they hold quite some amount of bitcoin but for now I don't think they will decide to sell everything because they already have a plan of making bitcoin to be the one to help there economy and with the step now other countries are trying to invest also just that now that countries are trying to invest, they will want to buy in large quantities and no matter how bad this is the price will still come up but the reason of selling will determine what will happen in the market.

And if you look El Salvador they are doing all they can to be outstanding in the market, because the decision there government is making will make things more easy for them in the future but now how do they consider the future because how will they make thing possible especially when they want to sell and eventually they wil have to sell because the whole purpose of investing is to make money.

And when it comes to economy issues I think there government made one of the best situation because now there economy is taking shape.

[Mate2237]

A country that has purchased 5,900 BTC is not a poor country about those countries that has not purchased 0.000001 unit of Bitcoin are the poor country. El Salvador will be one of the richest country in the world with the investment of Bitcoin they will make the citizens proud. And if they sell their Bitcoin, they will become rich and bitcoin price will increase very high so id you planning to buy bitcoin and thinking that the price is too high now then I advise you to buy more bitcoin now because the price is going to rise to the one of the highest price of $1 million and above and if you have a reasonable amount of bitcoin before it hits that amount then you will be smiling.

Selling off their will increase the quantity in the market and also increase the price.

[Synchronice]

Dude, are you serious? Absolutely nothing will happen, they hold only 6000 Bitcoins.

Yes, I know. I mentioned that in the OP. My question was more about the psychological effects.

Do you mean how will people react to El Salvador selling Bitcoins? If yes, then I'd say that nothing significant will happen. Despite the fact that El Salvador is the first country to adopt Bitcoin, we should keep in mind that it's Bitcoin adoption has never driven the market up (correct me if it's wrong info), so it's sell off won't affect the market either. There might be a small psychological factor but I believe that it will be fixed within few hours.

I do not think that we will crash too much, not like go back to last year, but it will have some 15-20% drop without a doubt. It's the emotional reaction that will cause people to sell, that's the most important part and because of that I believe that we are going to end up with a bad result if they end up selling.

That's a huge man, 15-20% drop won't happen, El Salvador isn't that powerful, nor that influential. There might be a maximum 5% drop that will be fixed within hours or if we take maximum, in a few days. El Salvador is not a big emotional hit. I can't prove that I'm correct but I 100% believe that El Salvador won't affect market psychologically that hard.

[lizarder]

El Salvador is probably a bitcoin believer and is not there to flip for some altcoin.
Even if they decide to take profits at some point of time, it won't create a negative impact considering their economical state.
Although it might create a temporary dump in bitcoin price but it will recover sooner or later.
Whats more concerning are these corporate companies which hold large amount of bitcoins.
We can't imagine if all of them start selling off their coins.

It would be very funny for El Salvador to sell bitcoin to buy altcoins and I don't think it will ever happen because they have made bitcoin a strong foundation as a legal tender country. Bitcoin is a big force in the country and they even make huge profits in bitcoin, with the amount of bitcoin they currently hold it will definitely have an impact on the market if they plan to sell it all. But we also have to see how El Salvador approaches it and maybe their target is not a one-time sale because they are maintaining value.

For market conditions it will definitely have an impact and it is possible that bitcoin will experience an increase or decrease, but it is definitely temporary because it can definitely go according to the conditions that occur. So there is no need to worry because Bitcoin always gets a moment of recovery even though there is a severe correction in the market caused by several events.