Did Bukele ruin El Salvador with his bitcoin purchases?

Bitcoin for financial independence and for the inclusion of the poor in the banking system. With these promises, El Salvador President Nayib Bukele made BTC the official national currency last September. But as BTC’s price is stumbling, worries about a Salvadoran national bankruptcy grow.

As of June 14, the price of the key cryptocurrency was temporarily at US $ 21,047, a new low for the year. The Hodlers are concerned about their structures. How is the state, which is said to own a proud Bitcoin 2301? El Salvador is said to have lost around US $ 40 million on its cryptocurrency investment so far. The price of BTC has halved since September 2021. But at least Finance Minister Alejandro Zelaya has recently been calm. Noisy Reuters the politician explained in a press conference on June 14:

When I’m told that El Salvador’s budget risk is really high due to Bitcoin, I can only smile. Household risk is extremely low.

The $ 40 million lost would therefore only represent 0.5 percent of the national budget. But whether El Salvador’s finances are really doing so well is a matter of great debate.

Bukele plays on his smartphone

A central point of the dispute is Nayib Bukele himself. The president loves the self-portrait and Twitter. There he also likes to claim that he buys more Bitcoins via smartphone, obviously at the expense of the state budget. Bukele also bought the dip this way in May. For his country, he acquired 500 Bitcoins at an average price of $ 30,744. how Bloomberg Bukele in January called him the only head of state who exchanges public funds with the mobile phone, Bukele did better: he did it naked, added added the president.

Such bullish statements have sparked sympathy in the cryptocurrency community. Bukele’s authoritarian style of government is controversial. Critics accuse him of abolishing the democratic separation of powers. This causes problems with the US and the International Monetary Fund (IMF) is far from impressed with Bukele’s Bitcoin price. Loan negotiations in January failed, with huge debt repayments due to El Salvador in 2023.

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El Salvador’s bitcoin projects are suspended

It remains to be seen that so far the country has barely been able to implement its own crypto plans. Due to the drop in the price of Bitcoin, the introduction of the planned BTC government bond has been postponed indefinitely. So far, there is only one golden model of the crypto city that needs to be funded with it.

A study by National Economic Research Office it also showed that BTC adoption in the country is not really progressing. Particularly bitter: El Salvadorians receive US $ 6 billion annually from abroad, most of which comes from the United States. Bitcoin was supposed to make such payments cheaper and easier. But strong NZZ Bukele’s promise was also not kept. Because the recipients trade the BTC received in US dollars and there are no high fees.

This may already indicate that if Bukele has been gambling, the population will have to pay for this mess.

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