El Salvador’s President Nayid Bukele’s faith in bitcoin has yet to waver. He announced on Thursday that the government bought 80 more coins as the cryptocurrency went down to US$19,000 apiece, saying “Bitcoin is the future! Thanks for selling cheap.”
The recent transaction adds to the country’s hoard of 2,301 BTC, which was bought at an average price of US$45,171 per coin, or around US$104 million total. Thursday’s dip basically means that the country already has losses of about US$60.2 million.
When the cryptocurrency went below US$20,000 in mid-June, an undeterred Bukele tweeted that “patience is the key.” Saying that bitcoin value “will immensely grow after the bear market.” And so the Central American country is seizing the opportunity as bitcoin’s value slides further.
Alejandro Zelaya, the country’s finance minister shares the president’s glass-is-half-full perspective. Instead of calling them unrealized losses, he’s saying that since the country hasn’t really sold its bitcoin, it hasn’t really had any losses yet.
El Salvador is the first country in the world to make the cryptocurrency legal tender when Bukele signed the bitcoin law last year. The International Monetary Fun has pushed the country to remove bitcoin’s legal tender status, underlining ”large risks associated with the use of bitcoin on financial stability, financial integrity and consumer protection.”
The president’s obsession with bitcoin might just be an extreme case of looking at things from a glass-half-full perspective. Not only has their bitcoin hoard lost far more than half its value, the bitcoin adoption Bukele’s was hoping for so far isn’t taking off, and the country is in dire need of cash to settle debt payments amounting to over US$1 billion by next year.
Information for this briefing was found via Twitter, CNBC, Coindesk and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.