After El Salvador approved its Investment Banking Law, Bitcoin has re-captured institutional interest, a measure that could transform the country into a regional cryptocurrency hub. The legislation was passed on August 7, separating investment banks from commercial lending institutions and granting them broader powers to hold Bitcoin and other digital assets on their balance sheets.
Under the new framework, licensed institutions can operate using legal tender, foreign currencies, and digital assets (including Bitcoin), but can only collaborate with 'mature investors', a category similar to qualified investors in the U.S. These banks will need at least $50 million in capital and will provide clients with market knowledge and at least $250,000 in investable assets.
Juan Carlos Reyes, chairman of the El Salvador Digital Assets Commission, stated that the law allows banks to operate fully as Bitcoin-centric entities. This opens the door for tokenized bonds, stablecoin services, and even large-scale project financing through crypto-based instruments.
Government allies believe the law will attract substantial foreign capital, while critics argue that these benefits will favor large corporations rather than ordinary citizens.
Strategic partnerships drive cryptocurrency adoption
The support for Bitcoin is not limited to domestic reforms. President Nayib Bukele recently met with Pakistan's Minister of State for Cryptocurrency and Blockchain Bilal Bin Saqib to discuss national-level adoption strategies and energy policies to support the mining industry.
Regional cooperation is also expanding. On July 30, the Central Bank of Bolivia signed a memorandum with Salvadoran regulators to promote the use of cryptocurrencies in the event of severe dollar shortages. Tether (USDT) CEO Paolo Ardoino stated that this situation is driving Bolivians to turn to dollar-backed stablecoins as a viable medium of exchange.
These developments suggest that El Salvador's strategy is about positioning itself within the global financial network as well as internal market growth. (Investment Banking Law) can serve as a gateway for institutional-grade products, making the country an attractive entry point for global investors seeking regulated Bitcoin exposure.
Bitcoin technical outlook: aiming for $130
Bitcoin price predictions seem bullish as BTC is trading at $0.28 after a daily gain of 118,059%, breaking out of a bullish flag pattern formed over several weeks of consolidation.
This trend is supported by a rising trend line that has consistently established higher lows since late June, with the 50-day moving average at $113,732 acting as a key dynamic bottom.
If the price re-tests support levels, $113,678 and $110,721 (corresponding to 38.2% and 50% Fibonacci retracement levels) may attract accumulation. For traders, potential setups could include buying on dips between $117,000 and $115,000, setting stop-losses below $110,000, with a target of $130,000.
If macro tailwinds and ETF fund flows align with institutional drives in El Salvador, Bitcoin could lay the groundwork for a larger uptrend by the end of the year, potentially marking the beginning of another parabolic rise.