El Salvador’s bitcoin experiment has been ongoing for less than a year. Things aren’t going as smoothly as the small Central American country had hoped, at least in terms of bitcoin investments as the crypto market enters a bloodbath.
El Salvador Bitcoin Experiment
Last June, El Salvador’s President Nayib Bukele shocked the globe by announcing that the country would become the first to use Bitcoin as legal cash.
Three months later, El Salvador passed the legislation, which drew criticism from global financial institutions such as the World Bank, IMF and the Bank of England.
El Salvador’s legalization of Bitcoin was opposed by Economist Steve Hanke. According to the expert, the decision will “completely collapse” El Salvador’s economy. He slammed the move as “stupid.” His explanation is that El Salvador is a dollarized country, and making Bitcoin legal tender will harm the economy.
While Bukele disregarded the criticism, the country continues to engage with bitcoin and the community in a number of important ways. Building BTC-oriented schools, setting up ATMs, mining the cryptocurrency utilizing the country’s volcanic power, and, perhaps most importantly, plans to construct a Bitcoin City were among them. With the latest purchase being 410 bitcoin for $15 million just yesterday.
Prior to the last purchase, the country had spent $70,561,800 on its Bitcoin stash. This indicates that El Salvador has allocated around $85,600,000 in bitcoin with the new cash injection.
Related article | El Salvador Plans To Give Small Businesses Low Interest Bitcoin-Backed Loans
Spending more than $85 million in less than six months on a volatile asset like bitcoin is dangerous on its own. Buying ahead of the $69,000 price peak and then seeing a 50% fall can surely put pressure on Bukele’s administration.
BTC achieved the aforementioned ATH in mid-November, but then began a downward trend in the months that followed. The most recent pullback occurred in the last few days, with BTC losing nearly $10,000 to reach its lowest price since before El Salvador legalized cryptocurrencies.
BTC/USD trades at $36,700. Source: TradingView.
Bitcoin is currently trading about $36,700, up $3,700 in the last 24 hours. Nonetheless, it means that El Salvador’s BTC investment is down by more than 23%. This is due to the fact that the entire stockpile of 1,801 coins is now worth slightly less than $66 million.
Bukele Unconcerned
Bukele seems unfazed. He joked on Twitter about a new job at McDonald’s. He made remarks towards non-believers the day before.
Most people go in when the price is up, but the safest and most profitable moment to buy is when the price is down. It’s not rocket science 🤷🏻♂️
So invest a piece of your McDonald’s paycheck in #Bitcoin
Now go back to flip more burgers you lazy fvçk!
— Nayib Bukele (@nayibbukele) January 24, 2022
Bukele’s witty tweet is part of a widespread online meme in which long-term investors of crypto assets, popularly known as HODL’ers or those who “hold on for dear life,” joke about their future jobs if their investments tank.
Related article | McDonald’s, Pizza Hut, Fast Food Chains In El Salvador Adopt Bitcoin Standard, Will They Hold?
Feature Image From Unsplash and Charts From TradingView.com