El Salvador has poor bitcoin investment fees: worth more than 2,000 BTC owned by the country, decreased about $ 40 million. The fall in value comes as the price of Bitcoin has rebounded to its lowest level in more than a year due to current market conditions.
El Salvador bitcoin holdings are down
El Salvador has spent about $ 105 million on its Bitcoin purchases. However, as of May 12, his holdings were worth $ 66 million.
President Nayib Bukele legalized Bitcoin in his country in September 2021 to improve the economy. El Salvador was also the first sovereign nation to buy bitcoin.
Now, the value of BTC has fallen 45% since El Salvador bought its first coins. However, these losses do not seem to deter the country. As President Bukele revealed on Twitter, he used the recent price drop to buy another 500 BTC.
The President of a Central American country writes in a tweet that the rest of the world will understand that “1 BTC = 1 BTC” – regardless of price development.
One thing I always admired about Steve Jobs was that he didn’t even look at Apple’s stock price.
He knew where his company was going.
The stock market will follow, when they understand.
– Nayib Bukele (@nayibbukele) June 6, 2021
What do the losses mean for El Salvador?
For a debtor country like El Salvador, investing in volatile assets like Bitcoin has drawn a lot of criticism.
A Bloomberg report categorically notes that the country’s bitcoin losses are as large as the next interest payment to bondholders. This is due on June 15th.
Former governor of the country’s central bank, Carlos Acevedo, understood the story best. It says that Bitcoin investments…:
“Risk because it is a highly volatile asset and an investment entirely at the discretion of the President. He buys them on his cell phone while trying to take advantage of a price drop. But he does not do it right because when he buys there is always a bigger drop in price. ”
That lack of accountability, or the purchase of President Bukele’s laymen, has divided its citizens and put pressure on the country ‘s links with organizations such as the International Monetary Fund (IMF). Talks between El Salvador and the IMF on increased fund facility have been stopped from last year.
In addition, U.S. officials raised concerns about the country’s decision to adopt BTC as a legal tender. In February, several members of the legislature proposed a bill. It should be checked how the US can defend themselves against El Salvador’s Bitcoin decision.
Text credit: Cryptoslate
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