Bitcoin is gaining renewed institutional attention after El Salvador approved its Investment Banking Law, a measure that could transform the nation into a regional crypto hub. The legislation, passed on August 7, classifies investment banks separately from commercial lenders, giving them broader powers to hold Bitcoin and other digital assets on their balance sheets.
Under the new framework, licensed institutions can operate in legal tender, foreign currencies, and digital assets — including BTC — but only with “sophisticated investors,” a category similar to accredited investors in the U.S. These banks will require at least $50 million in capital and will serve clients with market knowledge and a minimum of $250,000 in investable assets.
Juan Carlos Reyes, president of El Salvador’s Commission of Digital Assets, said the law enables banks to operate entirely as Bitcoin-focused entities. This opens the door to tokenized bonds, stablecoin services, and even large-scale project financing through crypto-based instruments.
Government allies believe the law will attract significant foreign capital, while critics argue the benefits will favor big business over everyday citizens.
Strategic Partnerships Drive Crypto Adoption
The pro-Bitcoin stance is not limited to domestic reforms. President Nayib Bukele recently met with Bilal Bin Saqib, Pakistan’s state minister of crypto and blockchain, to explore nation-level adoption strategies and energy policies to support mining.
Regional cooperation is also expanding. On July 30, Bolivia’s central bank signed a memorandum with El Salvador’s regulators to promote cryptocurrency usage amid a severe dollar shortage. According to Tether (USDT) CEO Paolo Ardoino, such conditions are pushing Bolivians toward dollar-backed stablecoins as a viable medium of exchange.
These developments suggest El Salvador’s strategy is as much about positioning itself in global financial networks as it is about internal market growth. The Investment Banking Law could act as a gateway for institutional-grade products, making the country an appealing entry point for global investors seeking regulated Bitcoin exposure.
Bitcoin Technical Outlook: Eyes on $130K
Bitcoin price prediction seems bullish as BTC is trading at $118,059 after a 0.28% daily gain, breaking out from a bullish flag pattern that formed over weeks of consolidation.
The move is supported by an upward trendline that has consistently delivered higher lows since late June, with the 50-day SMA at $113,732 acting as a key dynamic floor.
Bitcoin Price Chart – Source: TradingviewMomentum indicators are pointing higher. The MACD has turned positive after a bullish crossover, while the RSI sits at 57, signaling room for further upside before overbought levels.
The decisive break above $117,350, the 23.6% Fibonacci retracement, sets the stage for a test of $123,250. A close above that level could open the path to $127,000, with $130,000 as a medium-term target if buying pressure holds.
If price retests support, $113,678 and $110,721 — corresponding to the 38.2% and 50% Fibonacci retracements — may attract accumulation. For traders, a potential setup could involve entering on dips between $117,000 and $115,000, placing stops below $110,000, and targeting $130,000.
If macro tailwinds and ETF flows align with El Salvador’s institutional push, Bitcoin could be setting the stage for a much larger advance into year-end, potentially marking the start of another parabolic leg higher.
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