El Salvador Plans a Bitcoin City, BTC Trades at $58,000

22 Nov 2021 · 3rd Party Analysis

El Salvador Plans a Bitcoin City, BTC Trades at $58,000


In Summary:

  • Bitcoin trades near $58,000 after a weekend rally lifts the token’s price 7% to $60,100
  • El Salvador announces plans to build the world’s first Bitcoin City powered by a volcano

Bitcoin Price Gyrates Below $60,000 after Weekend Gains

Bitcoin, the biggest cryptocurrency in the world, attempted to bounce back from last week’s losses over the weekend. As a result, the price of the digital asset pushed to a Sunday high of $60,100 per coin as El Salvador announced a “Bitcoin City”.

Currently, a single bitcoin would set you back about $58,000. Short-term, the orange token is in decline, at least for the past week. In more detail, bitcoin snapped seven straight weeks of gains when it tumbled about 7.5% last week.

Crypto adoption, however, is not deterred by the sideways moving price of bitcoin. El Salvador, the first country to adopt bitcoin as legal tender, is marching forward with its grand bitcoin vision.

El Salvador Vows to Build a Bitcoin City with No Taxes

In latest signs of growing bitcoin acceptance, the small Central American country announced it is building a Bitcoin City. According to President Nayib Bukele, the city would be powered entirely by a volcano and its shape would be a circle like a coin. Additionally, it will host a huge bitcoin symbol in its center.

Moreover, the bitcoin city will have no property tax, no income tax and no capital gains tax. To pay for infrastructure and other expenses, the city will have its own bitcoin bonds. In other words, El Salvador will issue $1 billion in bonds backed by bitcoin. Half of them, or $500 million, will be sold to buy more bitcoin. The other half would purchase US dollars to cover running costs.

El Salvador’s President praised the new city concept at a Bitcoin summit hosted in his country last week. “Invest here and make all the money you want,” he said, promoting the Bitcoin city to foreign investors. “This is a fully ecological city that works and is energized by a volcano.”

Dive Deeper in the World of Trading

While bitcoin is shifting into gear for the trading week, the US dollar is aiming to regain its dominance in the forex market. More specifically, the EUR/USD pair resumed its slide from Friday and slipped to a Monday low of 1.1264. During the previous session, however, the exchange rate dropped to a 16-month low of 1.1249. Many traders find the current levels appealing for a long position in the EUR/USD.

Stocks, on the other hand, closed mixed Friday and US futures float to the upside early Monday ahead of the open. That said, Dow futures, S&P500 futures, and Nasdaq futures were higher by 0.3% each in pre-market trading today.

What to Expect in the Markets?

This week would be relatively quiet in terms of scheduled economic events and reports in the financial markets. Investors will watch for the third-quarter GDP data coming from the US on Wednesday.

Otherwise, US traders will enjoy Thanksgiving Day on Thursday and stocks will not trade. Also, Friday’s stock market session will be shortened to 1pm.

It’s worth noting that this week US President Joe Biden is expected to decide who should lead the US Federal Reserve. On this note, the term of the current Chairman, Jerome Powell, expires in February. Mr. Biden has signaled he’s looking to extend present Fed policies.

On the other hand, he could also decide to go for an alternative approach by choosing a contender, governor Lael Brainard. She has strongly backed the Fed’s rate policies during Mr. Powell’s term as Chair.

The President’s decision could be announced before Thanksgiving Day.

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