El Salvador’s president, Nayib Bukele, said today that the Central American country had bought another 80 bitcoins at $19,000 each.
Bukele Remains Bullish About Bitcoin
The president made the announcement in a tweet posted on his official handle, where he hailed Bitcoin (BTC) as “the future” and boasted about the “cheap” price his country had bought the coins for.
President Bukele has remained a staunch supporter of BTC even amid a crippling bear market, which has caused the cryptocurrency to lose as much as 50% of its all-time high price.
Although the tweet did not specify the amount El Salvador had spent on the purchase, a simple deduction places it at about $1.5 million. This amount marks El Salvador’s lowest spending on BTC ever since the country started buying the cryptocurrency in September 2021.
In June, when BTC fell below the $20K mark for the first time since December 2020, Bukele took to Twitter and wrote:
“I see that some people are worried or anxious about the #Bitcoin market price. My advice: stop looking at the graph and enjoy life. If you invested in BTC, your investment is safe, and its value will immensely grow after the bear market.“
In the end, he urged the crypto community to be patient so that they could ride out the stormy market.
El Salvador’s Bitcoin Reserve Loses Half its Value
El Salvador’s most recent BTC purchase was on the 9th of May. In that deal, the country bought a total of 500 BTC, which cost an average of $30,744. This means that the transaction was worth about $15.3 million.
Before today’s acquisition, El Salvador had spent $103.9 million to acquire 2,301 BTC. However, the country’s BTC portfolio is currently valued at about $46.6 million, meaning it is now 55% down on its BTC bet.
But the downturn has not dampened El Salvador’s enthusiasm for BTC. Speaking in June, the country’s Finance Minister, Alejandro Zelaya, said:
“There’s a lot of buzz lately with our Bitcoin strategy. I have said it repeatedly: a supposed loss of 40 million dollars has not occurred because we have not sold the coins.“
Zelaya also hinted that the steep drop in the price of Bitcoin didn’t pose much of a threat to El Salvador’s finances since the amount the country spent to buy the cryptocurrency was less than 0.5% of its annual budget.
IMF Critical of El Salvador’s Bitcoin Adventure
El Salvador became the first jurisdiction to legalize Bitcoin amid criticism from various global fiscal bodies. At the time, President Bukele advocated Bitcoin as a means to greatly expand financial inclusion and bring millions of hitherto unbanked people into the financial system.
However, in January 2022, the International Monetary Fund (IMF) suggested that El Salvador dissolve the $150 million trust fund it established when it legalized BTC and restore any unused funds to the national treasury. The IMF expressed concern over the price volatility of BTC and the potential for criminals to use it to evade law enforcement authorities.