Bitcoin trading losses may have cost El Salvador $10 million amid crypto slump, report says
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The recent crypto slump has not only affected retail and institutional investors but also the only nation where bitcoin is legal tender: El Salvador.
The Central American country, led by bitcoin-loving Nayib Bukele, has bought at least 1,391 bitcoins using public funds, according to Bloomberg, which estimated the holdings based on the president's tweets.
This means El Salvador would have shelled out roughly $71 million at an average purchase price of $51,056 per coin based on Bloomberg's tally, which took into account the time and day Bukele tweeted.
And working on the assumption that Bukele's government has not sold any of its bitcoin holdings, its portfolio would now have seen roughly a 14% loss, down to $61 million based on Wednesday's price.
The actual performance is unknown as the government's buying process, as well as its bitcoin address, is shrouded in mystery. Bloomberg reported that Finance Minister Alejandro Zelaya said last week that El Salvador had converted some bitcoins back into US dollars, but further details were scarce.
Bitcoin on Monday dipped below $40,000 for the first time since September 2021. At that point, the coin had tumbled by roughly 40% from its record high of $69,000 in November. Bitcoin has since bounced back to trade 2.5% higher at $43,785 as of Wednesday afternoon in New York.
El Salvador's aggressive bitcoin buying spree, particularly in moments when the coin's price is down — also known as buying the dip — began in September. This was the same month the Central American nation adopted the cryptocurrency as legal tender, making it the first country in the world to elevate bitcoin to that status.
This move propelled the 40-year-old president to fame,
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