El Salvador is now down over 31% on its Bitcoin bet

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Bitcoin investment from El Salvador has been hit hard due to the recent stock market crash. The country’s Bitcoin reserves suffered a paper loss of 31%. El Salvador spent $88.4 million on assets currently worth $60.3 million. Share this article

Bitcoin’s recent price crash resulted in an unrealized loss of 31.8% for El Salvador after pouring $88.4 million into the asset.

El Salvador’s bitcoin holdings plummet

El Salvador’s controversial bitcoin strategy is being tested after the asset’s rocky price performance over the past few weeks. The Central American country is now down more than 31% on its investment in the asset.

Over the past 30 days, Bitcoin’s value has fallen from around $51,000 to $33,500 at press time. It has struggled to find momentum since hitting an all-time high above $69,000 in November. As crypto investors lament the fall, El Salvador has also been hit hard.

El Salvador memorably became the first country in the world to make Bitcoin legal tender in September. Since then, President Nayib Bukele has led the country’s efforts to acquire Bitcoin, proudly announcing that he has “bought the dip” at various market retracements. To date, the country has spent around $88.4 million on 1,801 bitcoins at an average price of $49,100 per unit. The recent downturn means the nation’s holdings are worth closer to $60.3 million today, giving an unrealized loss of around 31.8%.

El Salvador initially spent around $35 million for 700 bitcoins shortly after accepting the asset as currency. In October, Bukele announced that the country had acquired another 420 bitcoins at a market price of around $59,000. In late November, shortly after Bitcoin hit its all-time high, it bought another 100 coins for around $54,000 each.

El Salvador’s monthly allocation continued in December with the addition of 171 more coins, ending 2021 with 1,391 BTC in its reserves. Bitcoin’s decline in January 2022 made it cheaper for the Bukele-led government to add its previous holdings. Last Saturday, the government bought more Bitcoin at its lowest price yet, adding 410 Bitcoin for $15 million. The country is now known to have 1,801 Bitcoins in its reserves.

Future prospects

While the adoption of Bitcoin in El Salvador was a watershed moment for crypto, major international monetary institutions like the International Monetary Fund and the World Bank have repeatedly criticized the move. Salvadoran citizens also took to the streets to protest against the adoption policy.

The rollout also ran into other technical issues. Citizens have faced inconvenience making payments due to reported issues with the country’s official bitcoin wallet, Chivo, and the bitcoin ATMs it installed to enable crypto-to-cash withdrawals.

Despite the above, Bukele’s government is unlikely to look to sell anytime soon. Bukele recently predicted that Bitcoin would hit six figures in 2022 and is currently working to launch the world’s first “Bitcoin City” in El Salvador.

As the crypto market suffered its steepest drop in weeks from Thursday to Saturday, Bukele seemed to see the fun side. On Twitter, he shared a photo of himself that had been edited to look like he was wearing a McDonald’s uniform, referencing a popular crypto meme that implies someone needs to get a job at the chain. fast food because he lost all his money. in a crypto downturn.

Disclosure: At the time of writing this article, the author of this article owned ETH and other cryptocurrencies.

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