El Salvador’s investment in Bitcoin has incurred a significant loss of approximately $18 million. Despite the recent surge in Bitcoin’s value, rising to around $35,000, El Salvador’s Bitcoin investment has failed to yield the expected returns, with a staggering shortfall.
Data from Nayibtracker, a platform that tracks BTC holdings in Central American countries, reveals that El Salvador is grappling with an unrealized capital loss of nearly $20 million. The nation made headlines when it became the first country in the world to adopt Bitcoin as legal tender. However, the initial enthusiasm surrounding the move seems to have hit a stumbling block.
Source: Nayibtracker
According to Nayibtracker’s data, El Salvador purchased 3,062 Bitcoins at an average cost of approximately $40,594.93 per coin, totaling around $124 million. At the time of writing, the price of Bitcoin hovers around $34,669. This means that the nation’s Bitcoin investment is currently facing a floating loss of $18.14 million.
El Salvador’s Bitcoin journey began when the country’s government, led by President Nayib Bukele, passed legislation in September 2021 to make Bitcoin legal tender alongside the US dollar. The move was celebrated by some as a groundbreaking step in the world of cryptocurrency, but it has not been without its challenges.
The substantial loss incurred by El Salvador’s Bitcoin investment raises questions about the country’s strategy and the viability of Bitcoin as a national currency. The decision to embrace Bitcoin was met with skepticism by international financial organizations and experts who expressed concerns about its potential impact on the country’s economy and financial stability.
One of the key challenges that El Salvador has faced is the volatility of the cryptocurrency market. The price of Bitcoin, like other cryptocurrencies, can fluctuate dramatically over short periods. In the case of El Salvador’s investment, the substantial gap between the purchase price and the current value of Bitcoin has resulted in a significant loss on paper.
It’s worth noting that cryptocurrency investments are inherently speculative and carry a degree of risk. The experience of El Salvador serves as a reminder of the unpredictability and volatility that can be associated with cryptocurrencies. This incident may also prompt other nations considering similar moves to proceed with caution and carefully evaluate the potential risks and benefits.
President Nayib Bukele has been a vocal proponent of Bitcoin and its potential benefits, including reducing remittance costs and increasing financial inclusion. The loss incurred on the Bitcoin investment, however, could prompt a reassessment of the country’s approach to cryptocurrency adoption and investment.
Source: https://azcoinnews.com/el-salvadors-bitcoin-investment-still-incurs-an-approximate-18-million-loss.html
