Bitcoin-strengthening leader in Salvador asks for patience
SAN SALVADOR, El Salvador – El Salvador’s Bitcoin-boosting president has asked people to be patient after the price of the cryptocurrency fell below $ 20,000 – less than half the price paid by the government.
According to the tracking site nayibtracker.com, El Salvador under President Nayib Bukele’s administration has spent around $ 105 million on Bitcoin, as of September last year, paying an average of almost $ 46,000 per coin.
The value of this investment in the currency, also known as “BTC”, is now estimated to have fallen by over 57%, or around $ 61 million.
“I see that some people are worried or anxious about the # Bitcoin market price,” Bukele wrote on his Twitter account late Saturday. “My advice: stop looking at the graph and enjoy life. If you invested in #BTC, your investment is safe and the value will grow enormously after the bear market. “
“Patience is the key,” the president wrote.
On Tuesday, when a Bitcoin publication insisted that El Salvador had lost “only” $ 40 million on the investment, Bukele tweeted with apparent disbelief: “You tell me we should buy more #BTC?”
Bukele became the first leader in the world to make cryptocurrency a legal tender last year and was a devoted booster at least until May, when he boasted of “buying dip” in the currency’s price. But the coin has slipped further since then.
Finance Minister Alejandro Zelaya tried to put a good face on the situation on Wednesday in an interview with a local TV station, and said that because El Salvador has not sold any of its Bitcoins, it has not really suffered any losses.
“When they tell me that El Salvador’s budget risk has increased because of the assumed loss, that loss does not exist,” Zelaya said. “It has to be made clear, because we have not sold.”
However, most companies and governments write down the value of what accountants call an “unrealized loss”, even if they do not sell the distressed asset.
Zelaya also insisted that the Bitcoin glide does not mean much to El Salvador, saying that “this does not even represent 0.5% of our budget.”
It can prove difficult to sell in a country where about one-fifth of the population lives on less than $ 5.50 a day.
In January, El Salvador rejected a recommendation by the International Monetary Fund to drop Bitcoin as a legal tender.
Zelaya said at the time that “no international organization is going to make us do anything, anything at all,” calling it a matter of “sovereignty.”
The IMF recommended El Salvador to dissolve the $ 150 million trust fund it created when it made the cryptocurrency a legal tender and return some of that unused funds to the Treasury.
The IMF cited concerns about the volatility of Bitcoin prices, and the possibility of criminals using the cryptocurrency.
Bukele has identified Bitcoin as a way to significantly increase financial inclusion, and draws millions of people who previously lacked bank accounts into the financial system. He has also talked about the parallel tourism campaign aimed at Bitcoin enthusiasts.
Bukele led the push to use Bitcoin as a legal tender along with the US dollar. El Salvador’s Legislative Assembly made the country the first to do so in June 2021.
