It has been one year since El Salvador adopted bitcoin as a legal tender. Nayib Bukele, the president of El Salvador, argued last year that this would be for the better, but the country suffered significant losses as a result. How is this portfolio doing now?
First purchase: 200 BTC
Exactly one year ago, bitcoin was worth about $52,000. The Salvadoran government made the first purchase of 200 BTC one day before the start of adoption, on September 6. For this, the country put down $10.36 million at an average price of $51,800.
Of course, that’s a big difference from the current bitcoin price of about $19,000. Since its initial purchase, bitcoin has fallen by about 60%. So has this been a smart plan by the Salvadoran government?
Fortunately, someone has been creative enough to create a portfolio tracker of these bitcoin purchases.
This ‘Nayib Bukele’s portfolio tracker‘ – named after the president – indicates that the government has now purchased 2,381 bitcoins. This is $62.2 million less than the purchase price. Currently, the portfolio has a value of $44.9 million.
Not selling is not a loss
Alejandro Zelaya, El Salvador’s finance minister, came up with a well-known maxim from crypto-holders. Namely, he told them that the country did not suffer a loss on bitcoin purchases because they did not sell the coins.
Although the question is whether you want to sell them at all if the goal is literally to accept bitcoin. Fortunately for El Salvador, the absolute bitcoin gain – or well, loss – was not the sole purpose of the bitcoin adoption.
Other reasons for bitcoin as well
The Salvadoran government wanted bitcoin for several reasons. For example, the plan was to use bitcoin to attract foreign investment.
In addition, the country wanted to use it to create new jobs and reduce dependence on the U.S. dollar. Also, the country wanted to involve 70% of the population, who did not have access to banking services, in the financial system.
Despite this, the country was still making losses. Just when it wanted to be less dependent on the US dollar.
Perhaps El Salvador’s latest purchase – at a price of $19,000 – is the lowest ever, but who knows, the next purchase might come even lower. Bitcoin is still very volatile, but the country continues to believe in this bitcoin strategy.
