(Bloomberg) -- President Nayib Bukele’s Bitcoin gambit is becoming onerous for El Salvador, but that isn’t stopping him from adding to his stockpile.
The impoverished Central American country has bought 2,301 Bitcoins since making it legal tender in September, based on Bukele’s announcements on Twitter, including yesterday’s 500-coin purchase as the price fell below $31,000. The tokens are worth $74 million now, well below the $103 million Bukele paid for them, according to calculations by Bloomberg.
Bukele has shown himself to be a true believer in crypto, winning attention and admirers from around the world in the process, and says he trades the nation’s stockpile of coins on his phone. The 40-year-old has said he will push ahead with plans to issue a $1 billion blockchain bond to fund the construction of Bitcoin City, an income and capital gains tax-free jurisdiction he hopes to create on the country’s coast.
Bukele tweeted pictures on Monday of a mockup for the planned city, which includes an international airport. It would use geothermal energy from a nearby volcano.
Bukele’s office didn’t return a message seeking comment. The government doesn’t publish data on its Bitcoin holdings, and the activities of a $150 million fund to back Bitcoin conversions at state-run bank Bandesal has been deemed confidential. The central bank declared information about remittances sent through the government’s Bitcoin wallet, Chivo, a state secret.
The nation’s dollar bonds have lost 24% this year, among the worst performers in JPMorgan’s emerging market bond index. The government has $800 million of notes coming due in January. Moody’s cut the nation’s rating to Caa3 last week citing increased risk of default.
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