El Salvador Buys The Dip With 80 More BTC

Key Insights:

  • President Nayib Bukele has added $1.5 million more in BTC to the stash.

  • El Salvador is currently down 55% on its Bitcoin investment experiment.

  • Economic woes hamper the country, but tourism has surged this year. 

On July 1, El Salvador’s enigmatic president Nayib Bukele tweeted that the country had bought another 80 BTC at around $19,000 each before adding, “Bitcoin is the future.” The total outlay for the purchase would have been around $1.52 million.

It brings the total amount of BTC held by the Central American country to 2,381 and has dropped the dollar cost average price.

The previous purchase was in early May when Nayib picked up 500 BTC for $15 million. However, the asset was priced at around $32,000 back then.

Holdings in The Red

El Salvador began adding Bitcoin to its treasury in September 2021 when it picked up 200 BTC. However, the asset was trading at over $50,000 back then. There were seven subsequent purchases that year and one in January when an additional 410 BTC were acquired for an average price of around $36,500.

The total value of El Salvador’s Bitcoin stash is currently $46.7 million, but the country is down around 55% on its investments, according to the Nayib tracker (which hasn’t included this latest purchase yet). It would lose about $58 million should it be sold. It is clear that Nayib Bukele has no intention of selling, having just reinforced his position on the asset.

El Salvador Finance Minister Alejandro Zelaya said in May that the amount of BTC the country held at that time represented less than 0.5% of its annual budget. He added that it posed an “extremely minimal” risk to the country’s fiscal position.

According to a CNBC article last week, economic growth in El Salvador has plummeted. Its deficit remains high, and the country’s debt-to-GDP ratio, which compares what a country owes to what it generates, will hit 87% this year, it added.

One upside from Bukele’s Bitcoin experiment is an increase in tourism which has jumped 30% since Bitcoin was legalized in September. Bukele’s approval ratings are also up at just above 85%, and he is due for reelection in 2024, his position almost guaranteed if Bitcoin markets are back in bull territory by then.

El Salvador has followed software firm MicroStrategy which also bought more Bitcoin this week, adding 480 BTC to its stash.

BTC Dips Below $19K

Bitcoin prices dipped to an intraday low of $18,782 during the Friday morning Asian trading session. However, it quickly recovered with a bounce back to $20,280 at the time of writing.

The asset has remained range-bound for the past fortnight but has lost more than 36% over the past month. Bitcoin is now down 70% from its $69,000 all-time high in November 2021.

The fear and greed index remains buried in the ‘extreme fear’ zone as the bears maintain their grip on the markets.

This article was originally posted on FX Empire