While bitcoin holders currently need nerves of steel, the recent price correction does not seem to have changed El Salvador’s Bitcoin strategy. Instead, President Nayib Bukele announced that the country has once again loaded up on the next reserve currency.
As recently as 14 January, Bukele had expressed his annoyance on Twitter that he had missed out on buying more BTC during the recent price drop. Due to the recent price drop, however, Bukele is happy that he is now getting even more Bitcoin for his money. For 15 million US dollars, El Salvador has bought another 410 BTC. As a result, El Salvador now holds 1,801 Bitcoins worth around 62.3 million US dollars.
President Nayib Bukele announced the purchase as usual via the short message service Twitter. Meanwhile, there is of course criticism from Bitcoin hater Peter Schiff, who accuses Bukele of wasting citizens’ money. Peter Schiff is a self-confessed Bitcoin critic and does not think much of El Salvador’s plan. He also calls on Bukele to show his private Bitcoin holdings if he is so convinced about the cryptocurrency.
Schiff looks like an angry old man when he speaks about bitcoin. Billionaire investors such as Bill Miller already understood bitcoin’s fundamental thesis. Luxury airline Emirates has recently announced to accept bitcoin as a means of payment.
El Salvador’s Bitcoin investment is in the red
For the 410 BTC, El Salvador has paid an average of around 36,500 dollars. Compared to the previous purchases of the previous 1,391 Bitcoins, this is a real bargain. Previously, El Salvador had paid almost 74 million dollars for 1,391 Bitcoins. This brings the country’s unrealized losses to around $27 million.
Considering El Salvador’s pressing financial situation, this is not a good look. Bitcoin has been legal tender in El Salvador since September the 7th but the bitcoin price didn’t surpass 100.000 USD as many believers expected. The president’s strategy is to ‘hodl’ bitcoin for a long period of time, something we rarely see among politicians who lack a long-term vision.
The legal tender law has made the country more independent from the US. In addition to Bitcoin, the US dollar has been the official currency in the country since January 2001. The Central American country hoped for an economic boost thanks to the bitcoin move. And it did play out well as the GDP was reported to be in the double digit arena for the first time in history. Even a Bitcoin City financed by Bitcoin bonds is part of President Nayib Bukele’s plans.
Let’s see where the president will take the country under his leadership. The fact that El Salvador’s move was criticized in the past, especially by the International Monetary Fund (IMF) seems like a positive sign.