The nation that became the first to legalize Bitcoin within its borders is still suffering from a significant unrealized loss in its bitcoin stack. Alejandro Zelaya the country’s Finance Minister, assured that the latest market crash would not affect the country’s fiscal health.
No Worries in El Salvador
This small Central American country made history around a year ago by announcing plans to adopt cryptocurrency as its primary currency during the Miami Bitcoin Conference.
The official announcement was made in September despite local criticisms and backlash from international financial institutions like the IMF.
El Salvador and its leaders made numerous pro-BTC efforts since then. They announced plans to create a Bitcoin City, and purchased over 2,301 bitcoins. The country’s last acquisition was made during the May market pullback. It spent $15.3 million on 500 BTC.
However, this time the situation is a little different. BTC plunged hard over the past week, losing nearly $10,000 to reach a multi-year low at $20,800. This was tapped earlier today.
El Salvador has yet to make a purchase of bitcoin. The nation’s Finance Minister stated at a press conference, however, that the market crash had not increased financial risks for adoption of BTC.
“When they tell us that El Salvador is at high fiscal risk because of Bitcoin, I can only smile.” The fiscal risk is very low.”
Zelaya pointed out that the loss in BTC investments of El Salvador of $40 million has been estimated. This amount is less than 0.5% of El Salvador’s overall budget.
Bitcoin and Saylor’s MicroStrategy
MicroStrategy’s unrealized BTC loss to El Salvador is only $40 million. However, it is much more severe. MicroStrategy, the biggest corporate bitcoin holder, has an unrealized loss in excess of $1 billion.
Yesterday, CryptoPotato reported that the company spent approximately $4 billion to acquire its nearly 130,000 coins. These holdings are now worth approximately $3 billion due to the market downturn.
However, MicroStrategy’s founder and CEO is still bullish about BTC. This refutes any notion that MicroStrategy would sell any of its bitcoins.
Marla Brooks – Financial Analysis
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