SAN SALVADOR, El Salvador (AP) – El Salvador’s Bitcoin-boosting president has asked people to be patient after the cryptocurrency’s price dropped below $20,000 — less than half the price the government paid.
According to the tracking site nayibtracker.com, under President Nayib Bukele’s government, El Salvador spent about $105 million on Bitcoin starting last September, paying an average of nearly $46,000 per coin.
The value of that investment in the currency, also known as “BTC,” is now estimated to have fallen by more than 57%, or about $61 million.
“I see that some people are concerned or anxious about the #Bitcoin market price,” Bukele wrote on his Twitter account late Saturday. “My advice: stop looking at the chart and enjoy life. If you have invested in #BTC, your investment is safe and its value will grow tremendously after the bear market.
“Patience is the key,” the president wrote.
On Tuesday, when a Bitcoin publication crowed that El Salvador has lost “just” $40 million in its investment, Bukele tweeted in apparent disbelief, “You’re telling me we should buy more #BTC?”
Bukele last year became the world’s first leader to make the cryptocurrency legal tender and was a committed booster at least until May, when he boasted that he “bought the dip” in the currency’s price. But since then, the currency has continued to fall.
Finance Minister Alejandro Zelaya tried to put a good face on the situation in an interview with a local television station on Wednesday, saying that because El Salvador hasn’t sold any of its Bitcoins, it hasn’t suffered any real loss.
“If they tell me that El Salvador’s fiscal risk has increased because of the alleged loss, that loss does not exist,” Zelaya said. “That should be clear, because we have not sold.”
However, most companies and governments write down the value of what accountants call an “unrealized loss,” even if they don’t sell the distressed asset.
Zelaya also emphasized that the Bitcoin slide doesn’t matter very much to El Salvador, saying that “it doesn’t even represent 0.5% of our budget.”
That can be a tough sell in a country where about a fifth of the people live on less than $5.50 a day.
In January, El Salvador rejected an International Monetary Fund recommendation to drop Bitcoin as legal tender.
Zelaya said at the time that “no international organization will let us do anything, anything”, calling it a matter of “sovereignty”.
The IMF advised El Salvador to dissolve the $150 million trust fund it had created when it made the cryptocurrency legal tender and return all those unused funds to its treasury.
The IMF was concerned about the volatility of Bitcoin prices and the possibility of criminals using the cryptocurrency.
Bukele has touted Bitcoin as a way to significantly increase financial inclusion, drawing millions of people who previously did not have bank accounts into the financial system. He has also talked about the parallel tourism promotion aimed at Bitcoin enthusiasts.
Bukele led the push to use Bitcoin as legal tender alongside the US dollar. El Salvador’s Legislative Assembly made the country the first to do so in June 2021.