"Buying 1 Bitcoin Every Day" El Salvador's Unstoppable Bitcoin Experiment

Purchased for a total of 107.15 million dollars with losses exceeding 60%... Default risk also present
Evaluation loss of 91.3 billion won is similar to the agriculture ministry's budget, which is crucial for resolving the food crisis

President Nayib Bukele of El Salvador. Photo by Yonhap News

[Asia Economy Reporter Kim Sung-wook] The 'Bitcoin experiment' in Central America's El Salvador is set to continue. Last September, El Salvador became the first country in the world to adopt the cryptocurrency Bitcoin as legal tender, purchasing $10 million (approximately 13.1 billion KRW at the time) worth of Bitcoin.

On the 17th (local time), President Nayib Bukele of El Salvador announced on Twitter, "Starting tomorrow, we will buy one Bitcoin every day." Despite the cryptocurrency market crashing following the bankruptcy filing of crypto exchange FTX, El Salvador plans to continue its 'Bitcoin accumulation' strategy. The country has repeatedly made additional purchases at market lows during previous crashes and has so far bought Bitcoin in 11 separate transactions totaling $107.15 million (about 144.9 billion KRW). Currently, El Salvador holds 2,381 Bitcoins.

El Salvador's Bitcoin returns have plummeted. According to Cointelegraph and others on the 15th, El Salvador has suffered losses exceeding 60% of its investment following FTX's bankruptcy filing. According to Nayib Tracker, a private website that shows El Salvador's Bitcoin investment gains and losses in real time, the losses are estimated at around 63% of the invested amount. The loss amounts to $67.54 million (approximately 91.3 billion KRW), which is close to the entire annual budget of El Salvador's Ministry of Agriculture, which is fighting to alleviate the nation's food crisis, set at $77 million.

The El Salvador government is actively encouraging the use of Bitcoin for overseas remittances and everyday purchases. However, according to data from the Central Bank of El Salvador marking the one-year anniversary of Bitcoin adoption last September, Bitcoin remittances accounted for less than 2% of the total.

President Bukele remains optimistic about Bitcoin's future. Even in July, when the cryptocurrency market was struggling, he purchased an additional $1.52 million (about 201.46 million KRW) worth of Bitcoin, stating, "Bitcoin is the future. Thank you for selling it cheaply." In June, regarding the Bitcoin price crash, he advised, "Don't look at the graph, enjoy life. Once the bear market passes, Bitcoin investment is safe."

El Salvador's risk of default is also increasing. This year, the debt-to-GDP ratio is expected to exceed 85%. The international credit rating agency Standard & Poor's (S&P) has rated El Salvador's sovereign credit rating as 'CCC+,' indicating 'substantial risk,' the lowest level in Central America. Previously, the International Monetary Fund (IMF) strongly recommended that El Salvador revoke Bitcoin's status as legal tender, warning of "significant risks to fiscal stability and soundness."

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