In just over two years, Bitcoin (BTC) purchases made by the government of El Salvador are estimated at $126.8 million.
This is an amount of money that is currently worth $118.5 million the percentage of unrealized loss at 6.5%accordingly Calculations from Nayib Bukele Portfolio Tracker site tracker.
The numbers show a recovery in institutional investment of El Salvador, following losses throughout 2022, when amid the market decline, holdings lost 47% in value and losses were estimated at more than $53 million.
However, there is still time for Bitcoins to become profitable in the hands of the government, which can happen if the price of the cryptocurrency exceeds $40,000. This takes into account that the average purchase price of BTC from El Salvador is $40,488.
Bitcoin could exceed this value soon. Although it is not a given, it is possible that it will happen between December 2023 and January 2024, especially if the upward trend of the last few months continues. driven by expectations that the US will approve an ETF next year. The current price of the digital currency is already over $37,000.
BTC purchases already exceed 3,000 BTC
Bitcoin purchases are part of the strategy outlined by the Salvadoran President since September 2021, following the adoption of BTC as legal tender and the passage of the Bitcoin Law. The first purchase was about 400 BTC worth more than $20 million.
From then until June 30, 2022, the president tweeted about nine more purchases. Later, amid one of the sharpest market declines, in November 2022, Bukele said he would buy 1 BTC per day. From this date to April 30, 2023, approximately 164 Bitcoins were acquired.
The data processed by the tracker nayibtracker.com Indicate that this November 28, 2023 is El Salvador owns a total of 3,132 BTC. According to President Nayib Bukele, there are plans to increase the state’s foreign exchange reserves.
Investments have begun just before BTC hit its all-time high of almost $70,000. But then Bitcoin began a decline that intensified throughout 2022. A situation that, far from demotivating the Salvadoran government, prompted it to make further purchases hold Bitcoin.
«Buy the dip» (buy cheap), Bukele tweeted as he announced some of the investments. He repeated several times the term that investors use when they buy cryptocurrencies during corrections and declines in the hope that the price will then rise.
However, Bukele’s bet takes into account that the digital currency tends to rise in the long term It is not well understood by Salvadorans who have expressed their rejection. These include a lawsuit filed in 2022 by a human rights organization called Cristosal denouncing the lack of transparency in the use of public funds to purchase BTC.
As CriptoNoticias reports, there are complaints about the lack of information about the management of Bitcoin reserves and the fear of possible embezzlement of these funds were expressed in a recent report by Global Financial Integrity (GFI), a US-based think tank.
Against this backdrop, the government insisted on pushing ahead with its plan. He reminds critics that “these are losses that did not occur because we did not sell the coins, they were not disposed of.”