Thursday, March 30

How much money has El Salvador lost after the adoption of bitcoin? | Digital Trends Spanish

Being the pioneer is not always synonymous with success. El Salvador was the first country to adopt bitcoin as its official currency, but was it a good investment? The panorama does not seem to be so encouraging for the initiative of the controversial president Nayib Bukele four months later, so it’s worth asking How much money has El Salvador lost after the adoption of bitcoin?

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Since the end of 2021, the question about El Salvador’s possible losses began to haunt investors, financial analysts and Salvadorans themselves, after the value of the virtual currency fell at the beginning of that year.

How many bitcoins does El Salvador have?

To assess the losses, the first thing that is needed is to know how many units of bitcoins the government of El Salvador has bought as of September 7, 2021, when the bitcoin law came into force.

Based on the announcements that Bukele has made via Twitter and since no assets have been reported, it is estimated that as of January 31, 2022, the country had 1,801 bitcoins.

This portfolio includes the 21 bitcoins that the ruler bought on December 21, 2021, due to the symbolism that this number represents for bitcoin and the 21,000 square kilometers of the country’s territory.

And we are buying 21 #bitcoin for the occasion 🥳

— Nayib Bukele 🇸🇻 (@nayibbukele) December 22, 2021

In addition, consider the 410 bitcoins that the country bought on January 21, 2022 and that according to President Bukele cost $15 million dollars, an average of $36,500 dollars.

So how much money has El Salvador lost?

President Bukele of El Salvador announces Bitcoin City
Getty Images

Since El Salvador uses bitcoins as investment instruments, strictly speaking, it will only “make a loss” if it disposes of these currencies.

Due to the opacity with which the country has handled the purchase process, financial analysts cannot determine exactly how many dollars the government has invested or if it has had real losses.

However, at least it is money that is “withheld” and that the government cannot use to meet other obligations, as the International Monetary Fund (IMF) has warned.

In this way, specialized accounts have averaged the price of the virtual currency since September 7, 2021, when El Salvador adopted it as the official currency, to calculate whether there have been losses or gains.

Specialists estimate that each of the 1,801 bitcoins that El Salvador has in its possession cost $51,288 dollars, so the amount invested would be about $92.3 million dollars.

However, as of January 31, 2022, bitcoin was trading at $38,407, making the portfolio worth $69.1 million. In other words, the government of El Salvador would have lost some $23 million dollars in four months.

However, President Bukele estimates that bitcoin will reach $100,000 in 2022, so his bet with the currency would be medium to long term. We will have to wait.

A good way to know the evolution is through El Salvador Trackera Twitter account specialized in the Salvadoran bitcoin portfolio that daily publishes the evolution of the profits or losses of the Central American country.

Evolution of bitcoin in El Salvador as of January 21, 2021
Evolution of El Salvador’s bitcoin portfolio since September 2021, according to El Salvador Tracker.

Problems with Chivo Wallet

The collapse of the currency is not the only problem of the Bukele government, since many users have reported difficulties in the operation of Chivo Walletthe official bitcoin wallet of El Salvador.

In September 2021, the Bukele government gave all citizens the equivalent of $30 dollars in bitcoins to make purchases or pay taxes.

A market in El Salvador accepts bitcoin
Getty Images

However, since mid-December 2021, hundreds of Salvadorans have reported that their assets simply disappeared from their accounts. The government has not issued an official statement, although specific cases have been resolved in the wallet account.

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