El Salvador, the first government to adopt Bitcoin at the national level, is expected to lose about $ 40 million in its investment in Bitcoin. However, the country’s Finance Minister, Alejandro Zelaya, does not believe this is a cause for concern. According to Zelaya, $40 million is “not equal to 0.5 percent of our national budget,” according to a press conference on June 14.
El Salvador, according to the department, does not face any financial risks due to downtime.
Bitcoin lost about 30% of its value in the last 48 hours, and is expected to continue to lose value due to the presence of the most powerful traders in the market. The cryptocurrency is now trading at a much lower level since the end of 2020.
El Salvador’s tough time in Bitcoin
El Salvador is the first country in the world to officially launch cryptocurrencies. In his Twitter account, President Nayyib Bukele disclosed the country’s Bitcoin purchases.
Since El Salvador adopted Bitcoin in September 2021, the token price has dropped by more than 60%. El Salvador has been buying Bitcoin regularly since then, and now has a total of 2,301 coins.
Those tokens cost $ 45,171 each, with a total value of $ 103 million. As of Tuesday, Bitcoin was trading at about $ 22,000, costing El Salvador’s savings of about $ 50 million.
Bond issuance postponed
Although Finance Minister Zelaya dismisses financial threats posed by digital assets, the country is still plagued by market instability.
El Salvador had already postponed the planned Bitcoin bond offer due to weak market conditions. Bonds, which were supposed to be used to support the volcanic energy project, will now be released in September 2022.
The country also intends to use Bitcoin bonds to pay off its government debt. El Salvador, on the other hand, has been recommended by the International Monetary Fund and other authorities to consider its decision to use Bitcoin as a legal currency.
Read more: El Salvador’s Finance Minister announces Bitcoin bond might delayed further due to market crisis
