Bitcoin as Legal Tender: El Salvador’s Risky Financial Maneuver Struggles to Pay Off

Freelance Journalist

Andrew Throuvalas

Freelance Journalist

Andrew Throuvalas

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Andrew is a journalist and content writer with a passion for Bitcoin. His work has been featured with Cryptonews, Decrypt, CryptoPotato, and Bitcoin Magazine, among others.

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November 24, 2023 16:24 EST

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More than two years after implementing Bitcoin (BTC) as legal tender, El Salvador’s big crypto bet is still struggling to bear fruit.

That includes the government’s own BTC investments, which still appear to be underwater due to the president’s ill-timed buys.

According to the Nayib Bukele Portfolio Tracker website, the government currently owns 3,124 BTC worth $118.3 million. That’s down 6.44% – or $8.1 million – from the nation’s cost basis.

It’s hard to know exactly how much BTC El Salvador holds since the bank managing the government’s Bitcoin funds has remained curiously tight-lipped on the matter.

However, the website offers a rough estimate using the many public tweets from El Salvador’s Bitcoin-loving president Nayib Bukele – which include exact amounts and buy-in prices for the nation’s BTC investments.

The government began buying 550 BTC between September 6 and 7, just as the currency was established as legal tender. Purchased at an average price of ~$52,000, Bitcoin sank to $43,000 within only days.

Though that figure later rose as high as $69,000 by November 2021, the president caught many falling knives over the next several months. Between October and November 2021, for example, Buckle bought 520 BTC across two purchases for roughly $59,000 each, believing himself to have “bought the dip” each time.

Small, Consistent Investments

His Bitcoin purchase announcements became smaller and less frequent until November 2022. After Bitcoin plummeted under $17,000 following FTX’s collapse, Bukele vowed to purchase one Bitcoin per day, every day from then onwards.

Assuming he kept his promise, the nation has purchased 374 BTC since that time. Since Bitcoin has appreciated 128% since last year, El Salvador’s overall investment since that time has risen 45%, making up for much of its earlier losses.

The eccentric leader once claimed to have traded the digital currency using public coffers from his mobile phone, sometimes “naked” and “while in the toilet.”

The tracker’s sister website, saylortracker.com tracks the portfolio of MicroStrategy, whose laser-eyed chairman also loudly proclaims his company’s BTC investments.

Unlike El Salvador, MicroStrategy’s BTC ownership is verifiable through its quarterly financial reports. It’s also substantially in the green, boasting $1.28 billion in profits on its immense 158,400 BTC stack, now worth over $6 billion.