El Salvador was the first nation that had decreed that Bitcoin was a legal currency. However, the move has not been very successful in the country, and things are turning to worse in 2022 with the value of BTC tanking. BTC saw an overall decline of 17.5% over a few weeks. The bitcoins held by the Salvadoran government would be worth $59 million.
If a recent calculation by Bloomberg is believed, El Salvador’s fling with BTC has resulted in more monetary losses than profits.
According to President Nayib Bukele’s Twitter posts, the nation holds approximately 1,391 bitcoins. At the current price of BTC, around $51,056 per BTC, the value of this entire holding would amount to about $71 million.
#Bitcoin is a volatile, speculative asset. Nayib Bukele is yet to realize this as he continues to throw El Salvadoran taxpayer money into the Bitcoin fire. Speaking of fire, El Salvador’s dollar-denominated debt is in flames. pic.twitter.com/oOzftgFU5F
— Steve Hanke (@steve_hanke) January 13, 2022
Bitcoin values have tanked by 17.5 percent over the last few weeks
Given that in 2022, Bitcoin values have tanked by 17.5 percent over the previous few weeks, the present total value of the bitcoins held by the Salvadoran government would be worth $59 million.
In other words, the nation’s reserve of BTC has seen an erosion of values worth $12 million in public funds. However, these figures are on paper only if the nation has not sold or let go of any of its bitcoin, which also happens to be its legal tender and the world’s largest cryptocurrency by market capitalization.
Much of the above points are only speculative because there is very little transparency around bitcoin reserves, transactions, and policies.
Money Control quotes BlockBank’s head of operations, Nolvia Serrano saying, “So many things that are not being disclosed, like who’s holding the private keys to these Bitcoin, what is the criteria for saying, ‘Oh, today, we’re going to buy more Bitcoin, or we’re going to wait until next month, and more.”
El Salvador release $1 Billion Bitcoin bonds in any manner
However, the nation is not fazed by the setbacks and is all set to release $1 Billion Bitcoin bonds in any way. El Salvador finance Minister Alejandro Zelaya said that the government had prepared 20 bills to establish these bonds’ legal and financial framework.
El Salvador has rolled the red carpet for Bitcoin and has also asked BTC to mine in the nation using the abundant geothermal energy resources of the country. Of late, BTC mining faces a lot of flak because of high energy consumption and carbon emissions. The above offer, if accepted, will be mutually beneficial for both BTC and El Salvador.
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