Another Bitcoin-related tweet from El Salvador’s crypto-backing President gave rise to the next round of doubts over cryptocurrency being a legal tender in the country.
On June 19, when the price of Bitcoin fell below $20,000, President Nayib Bukele called people for patience against the background of the bear cryptocurrency market.
We have already tried to consider the losses caused to the El Salvadorian budget by the falling prices of Bitcoin. In mid-May, when the price of Bitcoin was slightly under $30,000, Bloomberg assessed the losses at $40 million. Now, as the price revolves around $20,000, the current value of the published Bitcoin reserves has dropped by another $20 million and is now calculated to have fallen by 54% in total, according to the tracking site nayibtracker.com. The average purchase price for the announced cryptocurrency deals is at the level of $46,000.
The commentaries on the tweet are mainly critical. Peter Schiff, CEO of an American broker-dealer company, notes that the President cannot be sure if the price of the digital asset will ever recover.
Many users accuse Nayib Bukele of gambling with Salvadoran people’s taxes.
Finance Minister Alejandro Zelaya insists that El Salvador hasn’t sold any of its bitcoins, so they haven’t really fixed any loss (let’s leave behind brackets the concept of an “unrealized loss” that is used in business accounting). She also added that the Bitcoin reserves “don’t even represent 0.5% of our budget.”
For a while now, El Salvador hasn’t been the only country with Bitcoin as legal tender: the Central African Republic also approved the cryptocurrency in April 2022. However, they have never shared the amount of Bitcoin acquired by the government. Running the only country in the world with published Bitcoin reserves in the government budget, President Nayib Bukele has to fight off the critics almost on his own. We hope the cryptonight, as Elon Mask recently put it, won’t last long.