El Salvador, the first country in the world to accept Bitcoin as legal cash in September 2021, is restarting its BTC purchases after pausing for several months due to the market’s bearishness.
The Bitcoin Hoarding Begins
El Salvador’s president Nayib Bukele declared on November 16 that starting on November 17, the country will begin daily Bitcoin purchases. The news was made close to three months following the country’s final BTC purchase in July 2022.
In September 2021, immediately after declaring Bitcoin to be legal cash, El Salvador began purchasing BTC. At the time, BTC was experiencing a bull market, and every purchase made by the country seemed profitable because the price was regularly setting new records. El Salvador’s early BTC purchases, however, began to look like a bet that resulted in significant losses when the bear market began to emerge by the second quarter of 2022.
Currently In the Red
Publicly available data indicates that El Salvador now has 2,381 BTC, with an average purchase price of $43,357. Consequently, the country’s BTC purchase cost close to $103.23 million, and the same BTC is today worth $39.4 million.
El Salvador’s losses in the upcoming months may be partially mitigated by the introduction of a new BTC purchase procedure at a time when the most popular cryptocurrency is trading at a new cycle low.
Beyond the small country’s losses on its Bitcoin purchases, the leading cryptocurrency has played a crucial role in considerably lowering the cost of cross-border remittances and boosting the tourism industry.
Cointelegraph’s Joe Hall is currently on the ground in El Salvador and only surviving on BTC. Early updates from Hall indicate that while the majority of tourism destinations accept Bitcoin, mobile applications and services still require improvement.
The harsh crypto winter may make El Salvador’s BTC adoption not seem particularly hopeful right now. However, based on the price cycle history of Bitcoin, the country can easily make up its losses in the following bull cycle by just hanging onto its BTC purchase.
Image Courtesy Of Shutterstock
