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Wednesday, May 25, 2022

El Salvador buys 500 more Bitcoin taking advantage of the drop in price

El Salvador acquired 500 bitcoins for 15.3 million dollars, taking advantage of the fall in the price of the cryptocurrency that is legal tender in the country, President Nayib Bukele announced Monday.

El Salvador “just bought” at a time of a fall in its value “500 coins at an average price of 30,744 dollars,” the president said on his Twitter account.

This is not the first time that the ruler announces the purchase of this cryptocurrency when its price is down. Last January he already bought 410 bitcoins when each one was around 36,456 dollars.

With the latest acquisition, El Salvador owns 2,301 bitcoins.

El Salvador became on September 7, 2021 the first country in the world to officially use bitcoin, legalizing its use in all transactions on par with the US dollar, the official currency for two decades.

When Bukele launched his plan, the bitcoin was hovering around US$47,000 and in early November last year, it reached US$67,000. Bukele took advantage of those gains to build a public veterinary hospital.

However, since that spike, its price has been on the decline.

The Salvadoran decision to adopt bitcoin as legal tender caused controversy. Earlier this year, the International Monetary Fund (IMF) urged the country to cancel this measure, considering that the use of this cryptocurrency entails “great associated risks”.

El Salvador has a public debt of around 90% of its GDP and is negotiating with the IMF a loan of US$1.3 billion to clean up its coffers.

It also has a pending issue of bitcoin bonds equivalent to US$1 billion, for the construction of its Bitcoin City, a city in the east of the country, which plans to operate with thermal energy from the Conchagua volcano.

Recently, the Minister of Finance, Alejandro Zelaya said that “it will be the President” who will give the order of when the issuance of debt papers in bitcoins will be made. According to Zelaya, “the ideal date” to put the bonds on the market is during “the first semester” of the year.

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