El Salvador Crypto Winter, WHO LAUGHS LAST, LAUGHS BEST !
In June 2021, In a huge and one-of-a-kind move, El Salvador, the small Central American country, surprised the world with its adoption of Bitcoin as a legal currency, allowing the consumers to use it in all their dealings alongside the US dollar.
El Salvador bitcoin bond reportedly hasn’t attracted investors
Plans to issue $1 billion worth of bitcoin bonds, which the state was betting on to increase the value of the digital currency, were halted after El Salvador’s $ 100 million market value fell by about a third, putting pressure on the country’s financial resources.
Analysts said the financial attractions of the bonds were limited. Bonds offer 6.5 percent annual vouchers — well below the current yield on El Salvador’s sovereign bonds — as well as 50 percent of bitcoin price gains five years later. They added that this made it more convenient for investors who want to support El Salvador’s broader cryptocurrency experience rather than seeking to make the best profit
El Salvador Bitcoin holdings down 50%
The Salvadoran government’s Bitcoin investment suffered a new setback, and its losses deepened to 50%, in the context of a new collapse in equity markets.
Salvador has spent the equivalent of $103.6 million for a total of 2,301 bitcoins, since September 7, 2021. The current valuation of the portfolio is about $52.3 million, with a loss of 49.51%, and its lowest point throughout the year.
The risk is ‘extremely minimal’ ?
El Salvador, the world’s first country to adopt bitcoin nationally, faces a loss of about $40 million with investments in this digital currency.
Nevertheless, the country’s Minister of Finance, Alejandro Zelaya, stated that the risk is ‘’ extremely minimal’’
Zelaya continued that the loss of $40 million due to investment in bitcoin did not account for even 0.5% of the country’s general budget, and therefore the decline in the price of bitcoin did not create any financial risks for El Salvador.
They didn’t sold bitcoin ! they doubled its holdings!
When the value began to fall, purchases continued. The last purchase was in early May. Nayib Bukele had announced the purchase of 500 BTC at a price of $30,744 per Bitcoin !!
In the meantime, the government had to suspend its Volcano Bounds project. In November 2022, when the market was very optimistic, Nayib Bukele announced a “Bitcoin City” project that would be built with the money of a $1 billion Bitcoin-backed bond.
Some investors believe the bitcoin bear market will have an end, the end of this year, others believe it’s not going to happen before the next block reward halving expected 2024 ! As it’s programmed and with this huge adoption from many big firms, bitcoin price is going to 6 figures soon or later,
So will El Salvador’s president laughs best?!