El Salvador continues to “bottom” Bitcoin

El Salvador continues to “bottom” Bitcoin

 

El Salvador just bought another $15.5 million worth of Bitcoin (BitfinexUSD) with its budget as the world's most popular cryptocurrency continues to sell off.


In a tweet on Monday, President Nayib Bukele revealed that the country has “bottom-fished” another 500 bitcoins into the government coffers.

This is El Salvador's largest crypto purchase since the country first started adding digital currency to its balance sheet in September 2021 - the same month the country became the first. adopt bitcoin as legal currency, along with US dollar.


Bitcoin is down more than 8% in the past 24 hours and down nearly 55% from its all-time high in November.


El Salvador bought bitcoin for an average price of $30,744, according to the President's tweet.


The country's total reserves amount to 2,301 bitcoins, or about $71.7 million at current prices, based on Bloomberg data.


This is the latest in a string of buying as prices have fallen over the past nine months. President Bukele — who has tied his political fate to the success of the Bitcoin experiment — doubled his bitcoin bet, as the crypto market plummeted.



The country's decision to put its trust in bitcoin is not without its skepticism. This skepticism has been growing in recent months



For months, the International Monetary Fund has criticized Bukele's bitcoin experiment.

In January, the IMF pushed El Salvador to abandon bitcoin as legal tender.


The IMF directors “emphasized that there are major risks associated with the use of bitcoin to financial stability, financial integrity and consumer protection, as well as the potential liabilities associated with it.” to finance”.


The report, published after bilateral negotiations with El Salvador, further pushes the authorities to tighten its bitcoin code by not recognizing bitcoin as legal tender.

The IMF report goes on to say that some directors have expressed concern about the risks associated with the issuance of bitcoin-backed bonds, referring to the president's plan to raise $1 billion through via “Bitcoin Bonds” in partnership with Blockstream, a digital asset infrastructure company. However, that bond offering was suspended in March due to "unfavorable market conditions", according to Finance Minister Alejandro Zelaya.


Part of El Salvador's nationwide shift to bitcoin also involved the launch of a national virtual wallet called Chivo that offers free transactions and enables fast cross-border payments. For a country where 70% of its citizens do not have access to traditional financial services, Chivo provides convenient transportation for those who have never been in the banking system.

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