- The recent bitcoin slump has cost El Salvador about $10 million in losses, Bloomberg estimated.
- Led by bitcoin-loving Nayib Bukele, the country has bought at least 1,391 bitcoins.
- El Salvador's aggressive bitcoin buying spree, particularly in moments when the coin's price is down, began in September.
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The recent crypto slump has not only affected retail and institutional investors but also the only nation where bitcoin is legal tender: El Salvador.
The Central American country, led by bitcoin-loving Nayib Bukele, has bought at least 1,391 bitcoins using public funds, according to Bloomberg, which estimated the holdings based on the president's tweets.
This means El Salvador would have shelled out roughly $71 million at an average purchase price of $51,056 per coin based on Bloomberg's tally, which took into account the time and day Bukele tweeted.
And working on the assumption that Bukele's government has not sold any of its bitcoin holdings, its portfolio would now have seen roughly a 14% loss, down to $61 million based on Wednesday's price.
The actual performance is unknown as the government's buying process, as well as its bitcoin address, is shrouded in mystery. Bloomberg reported that Finance Minister Alejandro Zelaya said last week that El Salvador had converted some bitcoins back into US dollars, but further details were scarce.
Bitcoin on Monday dipped below $40,000 for the first time since September 2021. At that point, the coin had tumbled by roughly 40% from its record high of $69,000 in November. Bitcoin has since bounced back to trade 2.5% higher at $43,785 as of Wednesday afternoon in New York.
El Salvador's aggressive bitcoin buying spree, particularly in moments when the coin's price is down — also known as buying the dip — began in September. This was the same month the Central American nation adopted the cryptocurrency as legal tender, making it the first country in the world to elevate bitcoin to that status.
This move propelled the 40-year-old president to fame, especially among the crypto crowd. Bukele has since unveiled one ambitious plan after another, with bitcoin as the central theme.
One of the initiatives he announced in November involved building a new city that will be funded by bitcoin, which he said will be built next to the Conchagua volcano in southeastern El Salvador. Another one included fast-tracking citizenship for investors who hold $100,000 in "volcano bonds" for five years. El Salvador had announced plans late last year to issue $1 billion in bonds to buy more bitcoin.
Despite the recent crypto slump, Bukele has remained bullish. At the start of the year, he predicted bitcoin would hit the $100,000 milestone by the end of 2022 and teased his Twitter followers of an upcoming huge surprise.