El Salvador’s Minister of Finance Alejandro Zelaya is not fussed about the prevailing volatile market conditions. El Salvador has determined that now is the right time to grit their teeth and continue to support Bitcoin (BTC), as it dips below the crucial support point of $22,500 at press time.
Minister of Finance Says There’s no Danger in the Big Picture
El Salvador became the first country to adopt Bitcoin as legal tender last year. Ever since that historic moment, numerous investments have been made, but a very high rate of poverty persists in the country, with 1 out of 4 citizens living below the poverty line. Amid the dramatic drop in Bitcoin’s price, Minister Alejandro Zelaya explained in a statement: “Forty million dollars (the deficit at the time) does not even represent 0.5% of our national general budget”.
The deficit now peaks at $54 million, as Bitcoin’s (BTC) price continues to drop. “When they tell me that the fiscal risk for El Salvador because of Bitcoin is really high, the only thing I can do is smile”. Indeed, smiling for the cameras, Alejandro Zelaya seems to understand the crypto community, who, just like the citizens of his native land, need reassurance during these uncertain times.
All Roads Lead to Bitcoin City
One might argue that the recent drop in the price of Bitcoin (BTC) could very well put the Central American country of El Salvador in jeopardy, as the country has spent $105 million USD on bitcoin since September 6th, 2021. On that day, the first 200 BTC bought by Nayib Bukele had an average value of $51,769.
Numerous other purchases have been made since then, the most expensive of which was made on October 27th, 2021. At the time, Nayib Bukele’s government paid an enormous $60,345 per bitcoin (1 BTC), acquiring 420 BTC.
A subseqent five instances of “buying the dip” occurred, with recent ventures happening this year, also happening to be the cheapest of the bunch. Nayib Bukele bought 410 more bitcoins (BTC) on January 21st, 2022, paying an average price of $36,585 USD per coin. The very latest addition to El Salvador’s bitcoin holdings happened just last month, when Nayib Bukele bought “the dip” once more, this time at a record-low price of $30,744. However, this still seems expensive when compared to Bitcoin’s (BTC) price today, which stands at $22,360 per coin at the time of this writing.
Feels like a good time time to run the numbers and check in on El Salvador's #Bitcoin investment, which Bukele has been growing since Sept 2021. As of today, months of buying-the-dip has yielded about $52.5 mil in losses (of taxpayer dollars) -- a return of negative 50.6%.💎 pic.twitter.com/NRzLbhL5qP— Gabriel Agostini (@_gabeagostini) June 13, 2022
El Salvador Plans to Buy 12 More Bitcoins
Nevertheless, El Salvador’s government is seemingly undeterred, and today announced its plans to buy “12.4 Bitcoins more”—a mere drop in the ocean compared to what Nayib Bukele and his team had purchased before. The news was met with sarcastic comments on the web, as one crypto enthusiast remarked “tell me your country is bankrupt without telling me your country is bankrupt.”
To conclude, the revolutionary plans of El Salvador’s extravagant president Nayib Bukele to build a Bitcoin-driven tax-free city may need to be put on hold, as the Central American country is facing down an $800 million debt to pay at the beginning of 2023.
El Salvador just announced they have “deployed capital to purchase another 12.4 bitcoins”— CryptoWhale (@CryptoWhale) June 13, 2022
They went from buying thousands, to buying double digits. Lmao!
Tell me your country is bankrupt without telling me your country is bankrupt.