El Salvador’s president, Nayib Bukele, is facing a lot of criticism after the recent decline in Bitcoin. He is accused of leading his country to bankruptcy. But true to form, he wants to reassure on the current market conditions.
Salvadoran president responds to concerns about bear market
As Bitcoin (BTC) has corrected sharply in recent weeks to fall below $20,000 for the first time in 18 months, El Salvador’s President Nayib Bukele has come under heavy criticism for investing heavily in the highly speculative cryptocurrency market.
Now, the country’s Bitcoin portfolio is suffering a multi-million dollar loss, bringing it close to default. But the country’s ever-so-crypto-friendly president is reassuring about investors’ growing concerns about the future of Bitcoin.
As tensions and fears rise amidst falling prices, Nayib Bukele decided to give advice through a tweet to Bitcoin investors who might be concerned about the prolonged bear market.
The president advises everyone not to follow the Bitcoin charts and to “enjoy life.” According to him, “patience is the key”. And it’s true that historical data shows that after every drop in its history, the famous cryptocurrency has risen to even higher highs.
But this tweet received mixed reactions from the cryptosphere, with many users pointing out that the country had procured bitcoins at a much higher price and that the market would continue its decline. And as with every crisis, there are those who think that Bitcoin is over, and those who think that Bitcoin will rise even stronger.
Some cryptocurrency enthusiasts have suggested that the Salvadoran president should launch bitcoin bonds.
El Salvador’s loss in its Bitcoin investments
On September 7, 2021, El Salvador became the first country in the world to adopt Bitcoin as a legal currency. At that time, the cryptomoney was trading around $50,000.
To find out how much the small country’s portfolio loss amounts to, a website nayibtracker.com tracks the amount of Bitcoin owned by El Salvador in real time, as well as the gains or losses of these investments.
It can be seen that El Salvador owns 2,301 Bitcoins, with a one-time cost price of $45,908.42 per Bitcoin (while Bitcoin is trading around $20,300 at the moment). Thus, the country’s investments in cryptocurrency show a 55% capital loss, or $58 million. This is, of course, an unrealized capital loss.
Despite the widespread criticism, Alejandro Zelaya, El Salvador’s Minister of Finance, dismissed claims a few days ago that the country had lost more than $40 million, saying:
“I have said it many times: A supposed loss of $40 million did not happen because we did not sell the bitcoins.”
Indeed, this loss is only temporary and no doubt El Salvador’s investments will return to positive territory when the market recovers.
