Bitcoin became legal tender in El Salvador on September 7, 2021. Since that day, it became possible to pay in BTC for goods and services in major popular outlets. We’re talking about chain establishments like Starbucks or McDonald’s.

Bitcoin in El Salvador

Along with this, the state began buying BTCs directly, that is, as an investment. The idea was definitely not appreciated by Moody’s rating agency representatives. They made it clear that the government’s actions could lead to distrust of foreign investors, who will doubt in the stability of the state’s economy and its future prospects. Read more about the situation in a separate article.

Judging by the current situation, world analysts’ warnings were still relevant.

Which countries are investing in Bitcoin

According to Cointelegraph’s sources, by today the Salvadoran government has already accumulated about 1,801 BTC over the past four months. The recent purchase has the lowest average price since BTC became fully legal in El Salvador.

Bitcoin’s falling price

El Salvador’s strategy of supporting crypto innovation and actively buying bitcoins has so far only brought losses to the country’s budget. Reddit users estimated that a total of nine rounds of BTC purchases were made by Nayib Bukele. After the precipitous drop in the Bitcoin price since the beginning of this year, the president’s venture no longer seems so successful: the Salvadoran government is now “in deficit” by more than $20.7 million.

Bitcoin purchases and El Salvador’s total losses


The country's average BTC purchase price is $47,828, which is significantly higher than today's Bitcoin exchange rate of $35,270. In total, the country invested $85.56 million in the first cryptocurrency, which has now turned into $64.83 million. The total loss is equivalent to 24.22 per cent.

It is important to note that these figures were taken according to Nayib Bukele's Twitter postings, which usually report on coin purchases shortly after transactions are made. Accordingly, some of the numbers may not be accurate, as El Salvador's BTC address is unknown, making it impossible to know the exact timing of the transactions. However, in any case, the general trend of significant initial investment drawdown is true.

Note that the losses are “unrealised” – that is, they will only be reflected in the budget if the coins are sold. Well, selling the coins in the near future is not necessary at all. The budget can wait a few more months, hoping that the value of the cryptocurrency will increase. In that case, it could even be sold at a surplus, although that will still have to wait.

El Salvador’s President Nayib Buquele

However, El Salvador is unlikely to get rid of its cryptocurrency reserves in the foreseeable future. Buquelet has made it clear that he sees Bitcoin as hardly the only measure to combat any problems in the country’s economy. As we can see, such a measure has so far failed to justify itself.

That said, Nayib himself has reacted to Bitcoin’s plunge. He tweeted an edited photo of himself, with a hat and a McDonald’s name sticker added to it. The president thus joked that with this kind of market behaviour, he would have to go to work at Mac.

This is a fairly popular joke within the cryptocurrency community. The fact is that McDonald’s is almost always looking for employees, which means it will also be possible to get a job there even during the so-called crypto-zima, which is a prolonged period of niche collapse.


We believe that the current situation in the cryptocurrency market seriously threatens Nayib Bukele's rating. After all, his support for Bitcoin is as open and active as possible, which means that citizens are well aware of the investment of public funds. Obviously, they are unlikely to like the fact that the country's money has previously disappeared because of an initiative by a president who did not consult with anyone before making the investment.

So in this case, Bukela can only hope for BTC appreciation and a rebound in the cryptocurrency market in general.

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