- El Salvador’s President, Nayib Bukele, buys 80 BTC at $19,000 apiece.
- Despite the nation suffering economic woes, President buys BTC worth $1.52 million.
- The country’s debt-to-GDP ratio is expected to hit almost 87% this year.
Amidst the peak of this bear market, El Salvador’s President, Nayib Bukele, doubled the country’s losing investment in crypto by purchasing 80 Bitcoin (BTC) priced at $19,000 apiece. Bukele announced this investment through his social media account. The total outlay for buying is over $1.52 million.
El Salvador bought today 80 #BTC at $19,000 each!#Bitcoin is the future!Thank you for selling cheap pic.twitter.com/ZHwr0Ln1Ze
— Nayib Bukele (@nayibbukele) July 1, 2022
The price Bukele paid to buy these 80 BTC is less than half the average price the El Salvador government paid for its previous $105.6 million stakes. Noticeably, last September, El Salvador paid an average of almost $46,000 BTC apiece, for a loss of around $59 million, which is roughly 56%.
Based on CNBC’s last week’s article, El Salvador’s $425 million BTC experiment isn’t saving its finances. The country’s economic growth has plummeted, its deficit remains high and its debt-to-GDP ratio is set to hit almost 87% this year. Stoking fears that the nation isn’t equipped to settle its loan obligations.
Earlier this year, El Salvador’s Finance Minister, Alejandro Zelaya pointed out that the loss ($40 million) from the amount of BTC the nation held at that time (2,301 BTC) represented less than 0.5% of its annual national budget. He added that the “fiscal risk is extremely minimal.”
However, these figures might prove a hard sell in an economy where almost one-fifth of the population lives on under $5.50 per day.
On the contrary, this BTC experiment has increased El Salvador’s tourism which hiked 30% since BTC was legalized in the country in September 2021. President Bukele’s approval ratings are soaring above 85% while he is due for reelection in 2024. Many anticipate that his position is almost guaranteed if the markets get back into the bull territory by then.
However, for now, the bears maintain their grip on the market as BTC is currently 70% down from its $69,000 all-time high in November last year. In the intraday trading graph, BTC prices dipped to $18,743 on Friday (Asian Trading Session) although it soon recovered with a bounce back to $20, 632 within 5 hours and fell back again to $19,434, at the time of writing.