El Salvador President Bets National Fate on 'Bitcoin': "Safe Investment... Enjoy Life"

$800 Million National Debt Repayment Due by January Next Year
Default Probability 48%

President Nayib Bukele of El Salvador.
Photo by Reuters Yonhap News

[Asia Economy Reporter Na Ye-eun] Nayib Bukele, the 40-year-old president of El Salvador who risked his country's fate on the world's first national adoption of the virtual asset (cryptocurrency) Bitcoin, is facing criticism for saying, "Don't look at the charts, enjoy life."

According to Yahoo Finance on the 20th (local time), President Bukele posted on his SNS, "It seems that some people are worried or anxious about Bitcoin prices. I want to advise you not to look at the charts but to enjoy life. Bitcoin investment is safe. Bitcoin prices will rise tremendously after the bear market ends. Patience is key."

Earlier, in September last year, he adopted Bitcoin as legal tender for the first time in the world and purchased a large amount of Bitcoin. He said, "The price of Bitcoin will reach $100,000 (about 120 million KRW) this year," and bought Bitcoin with government funds, but it eventually halved in value.

El Salvador spent $103 million (about 132.8 billion KRW) purchasing Bitcoin. However, the current value of the 2,301 Bitcoins held is $53 million (about 68.3 billion KRW), which has dropped to half the purchase price.

The El Salvador government must repay about $800 million (about 1.034 trillion KRW) in national bonds, with bond maturity due in January next year. As a result, El Salvador's default probability has reached 48%.

President Bukele made six predictions related to Bitcoin in 2022. He forecasted that Bitcoin prices would rise to $100,000 and that two countries would adopt Bitcoin as legal tender this year.

Recently, the Central African Republic became the second country after El Salvador to adopt Bitcoin as legal tender, but Bitcoin has plunged, showing unstable trends.

Meanwhile, according to the latest report by the National Bureau of Economic Research (NBER), more than 60% of El Salvadoran respondents answered that "after using the $30 provided by the government as a bonus concept, they are not using the government's Bitcoin wallet 'Chivo'."

President Bukele is encouraging Bitcoin use by providing citizens with a Bitcoin bonus worth $30, but it is still not widely used.

Additionally, 60% of all respondents said, "Although they own a smartphone, they have not downloaded Chivo." 89% of respondents said they have never used remittance services through Chivo, and 99% said they have never paid taxes using it. Furthermore, most respondents reported that they have never used the Chivo ATMs installed nationwide even once.

This content was produced with the assistance of AI translation services.