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El Salvador reaps huge profits from Bitcoin investment. Photo: BeinCrypto . |
On the morning of October 5 (Vietnam time), President of El Salvador Nayib Bukele posted a photo on X with the "cool face" icon. The photo's content is information about the amount of digital assets that this country holds, along with a significant increase in price since 2021. The young leader's strategy to legalize Bitcoin has faced a lot of criticism in recent times. But overall, they are still making a profit on paper.
According to a report by DropStab , El Salvador is holding 6,262 Bitcoins in its digital asset vault. The South American country's president has only been buying BTC since 2021. Their current value is around $770 million , with the digital currency trading around $122,000 on the morning of October 5, when Mr. Bukele posted.
The total capital that this country spent to buy Bitcoin during the past time is 300 million USD . Thus, they profited 470 million USD , equivalent to a rate of 156%. The average price that the South American country bought was 48,000 USD / BTC, a very good position compared to the market. The last time El Salvador bought Bitcoin was in early August, when it was at 114,000 USD .
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Portfolio and asset movements in El Salvador's digital asset vault. Photo: DropStab. |
However, with a long-term holding strategy, the country's profits remain on paper until it sells for profit. Meanwhile, the South American country faces economic instability. For much of the time since Nayib Bukele took office in 2019, El Salvador has been on the brink of default. As of the summer of 2022, some of the South American country's government bonds were trading below $0.30 .
To conserve cash, Mr. Bukele's government began delaying public-sector salaries. Investors braced for the worst.
However, El Salvador has overcome this by adjusting its Bitcoin policy in a timely manner. On February 26, the International Monetary Fund (IMF) approved a $1.4 billion loan to be disbursed over 40 months to the South American country.
To receive this money, El Salvador has made commitments to financial discipline, including the government of President Nayib Bukele agreeing to scale back its Bitcoin policy.
The agreement states that tax payments will only be made in other official tender currencies such as the US dollar. Additionally, private businesses in El Salvador will only accept Bitcoin on a voluntary basis, rather than being required as before.
In 2021, the South American country became the first to legalize Bitcoin, with then-President Nayib Bukele calling for a move away from traditional fundraising markets.
Instead, El Salvador is issuing Bitcoin bonds to raise capital for projects like “Bitcoin City,” which aims to create a cryptocurrency-based economic hub.
Source: https://znews.vn/bitcoin-lap-dinh-tong-thong-el-salvador-khoe-lai-dam-post1591000.html
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