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Bitcoin up 5% as El Salvador's President and Tron founder pledge to buy one a day

El Salvador's President Nayib Bukele speaks during a decoration ceremony to the Apostolic Nuncio to El Salvador Santo Gandemi, in San Salvador, El Salvador, October 26, 2022. REUTERS/Jose Cabezas
El Salvador's President Nayib Bukele has said he will buy 1 bitcoin a day. Photo: Jose Cabezas/Reuters.

El Salvador's President Nayib Bukele and founder of Tron cryptocurrency Justin Sun have decided to accumulate bitcoin at a pace of 1 BTC per day. The price of bitcoin has increased over 5% in the past week, according to Coingecko data.

On Wednesday, the Salvadoran president tweeted: "We are buying one #Bitcoin every day starting tomorrow."

The announcement was followed by Tron founder Justin Sun who pledged to mimic Bukele's accumulation strategy.

Check: Crypto live prices

Blue chips at the top of the cryptocurrency market have risen in value over the past week.

Bitcoin (BTC-USD) is up 5% in value over the past seven days, to a subdued $16,534 and ethereum (ETH-USD) is up 10% in the past week to $1,192. Dogecoin has seen a rise of nearly 15% over the past week to $0.085.

Read more: FTX crash wipes billions from market as Binance steps in to buy crypto rival

The President of El Salvador has responded to the current crypto-market rout with a pledge to buy bitcoin on a daily basis.

Cryptocurrency found Justin Sun responded to the tweet and said: "We echo Nayib Bukele’s initiative in buying bitcoin daily. We will also buy one bitcoin everyday starting tomorrow!"

Read more: Crypto winter: Investment lessons from $2tn crash

Bitcoin pioneer Max Kieser tweeted about the significance of the Salvadoran president's new strategy.

Keiser said: "I witnessed this tweet by Nayib Bukele being composed and posted first hand. Imagine being present at the signing of the Declaration of Independence in 1776. Salvadorans, and the world, are so lucky to live in the era of this political visionary and monetary freedom fighter."

The strategy employed by Bukele and Sun is commonly referred to as Dollar cost averaging.

This describes the steady and consistent accumulation of an asset regardless of market conditions.

The recent collapse of Sam Bankman-Fried's cryptocurrency exchange FTX threatens to prolong the crypto bear market.

Bitcoin has already declined by 76% since hitting a record high of $69,000 this time last year.

El Salvador announced bitcoin as legal tender in June 2021 in hopes that the cryptocurrency would help solve long-standing economic issues.

Since then the Central American country has been buying bitcoin at an average price of $43,000, the current price is just over $16,500.

So far El Salvador has accumulated an estimated 2,381 bitcoin which is a considerable bet for a developing country that the high-risk asset will appreciate long-term.

Justin Sun's Tron DAO Reserve has acquired millions of dollars worth of bitcoin to back his dollar-pegged stablecoin USDD.

The collateral backing USDD includes14,040.6 BTC and it described by its founder as "the most stable, decentralised, tamper-proof, and freeze-free stablecoin system".

Watch: It's too late' to use crypto as hedge against collapsing fiat currencies, says BitBoy Crypto | The Crypto Mile