Their Bitcoin acquisitions have a market value of just over USD 47 million, and the highest individual trade represents almost a 63% loss. The IMF urged El Salvador to remove the status of the legal tender of Bitcoin and expressed concern about issuing cryptocurrency-backed bonds.
The Bitcoin bought by the Salvadoran Government has lost half its value due to a recent sharp drop in the price of the cryptocurrency. That happened one year after they approved the law giving it the character of legal tender in the Central American country.
The Salvadoran President, Nayib Bukele, posted on his Twitter account that they have acquired 2,301 BTC. He said that they had invested the equivalent of USD 103 million at the current exchange rate.
However, the pioneering cryptocurrency recently suffered a sharp drop with a 17.14% loss compared to the previous day. In that way, its price reached its lowest level since December 2020.
When writing this article, Bitcoin plummeted to USD 20,531, a price not seen in 18 months.
As a result of those losses, the 2,301 tokens accumulated by the government are currently worth USD 47.2 million (54% less).
Bitcoin Has Accumulated a 70% Loss Since Its All-Time High
The value of the pioneering cryptocurrency has decreased by almost 70% since its all-time high of USD 69,000 in November.
Due to the recent drop in the price of Bitcoin, the reserve of El Salvador is now worth USD 47.2 million, a 54% loss.
The Salvadoran government bought over 2,000 BTC for the equivalent of USD 103 million, according to the local newspaper La Prensa Gráfica.
However, nobody knows with certainty how much Bitcoin his government has acquired, as President Nayib Bukele only announces the purchases on Twitter. The last time he bought the cryptocurrency was on May 9th, when he invested USD 15 million worth of public funds.
The acquisitions announced by Bukele have a market value of just over USD 47 million. Besides, the highest individual trade (420 coins at over USD 59,000 each) represented almost a 63% loss.
The head of state has said on several occasions that El Salvador has bought Bitcoin during a dip. His government took advantage of a price drop to acquire the crypto asset.
The IMF Urges El Salvador to Eliminate the Bitcoin Law
The Salvadoran government negotiated an agreement for USD 1.4 billion with the International Monetary Fund (IMF). That organization urged the country to limit the scope of the Bitcoin Law by removing its status as legal tender. They also expressed concern about the issuance of their cryptocurrency-backed bonds.
On previous occasions, the IMF has insisted that Bukele disassociate himself from the Bitcoin law. However, his government keeps its conviction to continue adopting cryptocurrencies in the national territory.
According to the Financial Times, Crypto lending platform Celsius Network and the exchange Binance decided to impose a corralito, thus affecting the market. In that way, they seek to stop the withdrawal of funds and prohibit transfers by their customers.
By Alexander Salazar