the Savior Bitcoin (BTC) the investment is doing poorly, with the value of the more than 2,000 units it owns falling by around $40 million. The drop in value results from Bitcoin falling at its lowest price in over a year due to current market realities.
El Salvador Bitcoin Holdings in the Red
El Salvador has spent around $105 million on its Bitcoin purchases, but the value of its holdings was around $66 million as of May 12.
President Nayib Bukele done Bitcoin legal tender in the country in September 2021 to improve its economy. El Salvador also became the first sovereign nation to buy Bitcoin.
According to data from CryptoSlate, the value of BTC has fallen 45% since El Salvador bought its first coins.
However, the losses have not daunted the country, since President Bukele revealed who took advantage of the recent price drop to buy an additional 500 BTC.
One thing I’ve always admired about Steve Jobs is that he didn’t even look at Apple’s stock price.
He knew where his company was headed.
The stock market will follow, when they understand.
– Nayib Bukele (@nayibbukele) June 6, 2021
The president of the Central American country, in a recent tweet, said that the rest of the world would come to understand that “1 BTC = 1 BTC” regardless of its price performance.
What do the losses mean for El Salvador?
For an indebted country like El Salvador, investments in volatile assets like Bitcoin have drawn a lot of criticism.
AN Bloomberg The report categorically stated that the country’s losses in Bitcoin are equal to its next interest payment to bondholders, which is due on June 15.
The former head of the country’s Central Bank, Carlos Acevedo, captured the situation better. He said that investments in Bitcoin are
Risky because it is an extremely volatile asset and it is an investment that is entirely at the discretion of the president. You buy it on your phone when you want to take advantage of the drop, but you don’t do it right because when you buy, there’s always a bigger drop.
This lack of accountability or capricious purchases by President Bukele has divided its citizens and tense the country’s relationship with organizations such as the International Monetary Fund (IMF). Talks between El Salvador and the IMF on an extended fund facility had stalled since last year.
Aside from that, US officials have also concerns expressed on the country’s decision to adopt BTC as legal tender. In February, some members of the legislature proposed a bill to review how the US can protect itself against El Salvador’s Bitcoin ruling.
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This post El Salvador’s Over $100M Bitcoin Purchase Now Worth $66M
was published first on https://cryptoslate.com/el-salvadors-over-100-million-bitcoin-purchase-is-now-worth-66-million/