El Salvador’s venture into the world of cryptocurrency under President Nayib Bukele’s leadership continues to face financial challenges. In November 2022, President Bukele initiated a strategy to purchase one bitcoin daily as part of a dollar cost averaging (DCA) plan. At that time, El Salvador already held 2,381 bitcoins, bought at an average price of around $44,300 each. However, with the price of bitcoin having fallen to $19,000, this represented a substantial loss of approximately $60 million.<\/p>\n\n\n\n
President Bukele has since been relatively silent about the nation’s ongoing bitcoin acquisitions, and the total amount currently held by El Salvador remains uncertain due to the lack of public government records. CoinDesk estimates that if El Salvador continued to purchase one bitcoin per day as planned, its holdings would have reached 2,744 bitcoins by November 14. With the median bitcoin price over this period, the average purchase price would have decreased to about $41,800.<\/p>\n\n\n\n
Considering the current bitcoin price of $36,000, El Salvador’s investment in the cryptocurrency is estimated to be at a loss of around $16 million. Despite this, the country’s broader financial outlook shows some positive signs. Since bitcoin was declared legal tender, the International Monetary Fund (IMF) has expressed concerns about increased economic risks and El Salvador’s debt repayment capabilities. Nonetheless, as of mid-August, El Salvador’s bonds had yielded a 70% return year-to-date, and several major banks predicted further gains. Furthermore, S&P Global recently upgraded the country’s debt rating from CCC+ to B-.<\/p>\n\n\n\n
President Bukele, who has announced his intention to run for re-election in 2024 and currently leads in polls, remains optimistic about the country’s financial trajectory. However, the adoption of bitcoin among the populace, particularly in the context of remittances, which are crucial to El Salvador’s economy, remains tepid. Central bank data reveals that only 1.2% of the $7 billion in remittances received in 2022 utilized cryptocurrency wallets, indicating a cautious approach to the bitcoin standard by the citizens.<\/p>\n","protected":false},"excerpt":{"rendered":"