- El Salvador, the first country to legalize Bitcoin, suffered a $36 million cryptocurrency loss on Thursday.
- The popular cryptocurrency plunged 50% from all-time highs this week.
- The government bought an additional 500 coins for $30,744 each on Monday, President Nayib Bukele said.
El Salvador, which became the first country to legalize bitcoin in September, lost $36 million in crypto on Thursday as bitcoin plummeted more than 50% from all-time highs.
President Nayib Bukele bets heavily that an increase in Bitcoin investment could save El Salvador’s economy with a growing debt-to-GDP ratio. Now, the cryptocurrency market crash is fulfilling critics’ warnings about investing Treasury funds in volatile digital currencies.
The Bukele administration has spent a total of $103 million on 2,301 bitcoins since September last year. Bloomberg data. As of Thursday afternoon, the coin is worth approximately $67 million. El Salvador currently has an estimated debt. $23.3 billion on national debt.
The International Monetary Fund (IMF) has warned the administration several times against legalizing Bitcoin as a means of purchasing or paying for debt. Peach Ratings in February downgrade El Salvador’s default rating is from “B-” to “CCC” due to legally induced financial uncertainty.
The IMF El Salvador team, led by Alina Carare, said: “Households and businesses that hold Bitcoin balances and save in Bitcoin can lose their wealth due to large fluctuations in value.” warning in February.
“The adoption of Bitcoin as a fiat currency is fully funded by public funds through trust funds,” the IMF said.
Despite the decline, President Bukele declared, “El Salvador has bought a bear market!” On Monday. This purchase was the largest in the United States, holding 500 Bitcoins averaging $30,744.
—Nayibbukele (@nayibbukele) May 9, 2022
Bukele’s bullish investment in cryptocurrency has drawn mixed reactions from citizens of the country as past Bitcoin protests have been painted. thousands of attendees. An administration spokesperson did not immediately respond to Insider’s request for comment.
according to September survey Most Salvadorians out of 1,281 (67.9%) do not agree with the government’s decision to legalize Bitcoin. As an insider previously reported, the country’s digital wallet “Chivo Wallet” has not been widely used because most sales continue to be paid in real currency.
Do you live in El Salvador? Were you affected by the Bitcoin crash? Contact this reporter at [email protected]