El Salvador has recorded some big bitcoin losses on its balance sheet. It looks like the Central American country has lost more than $36 million in BTC as of late due to the currency experiencing a major dip.
El Salvador Is Experiencing a Negative Side to Its Bitcoin Agenda
El Salvador was the first country to ever declare bitcoin legal tender. The currency has now been the staple asset of the Central American nation for as long as eight months, but the country has certainly experienced some ups and downs as it makes this drastic financial turn.
A big one has been that bitcoin – which we all know is very volatile – often goes up and down without notice. The currency could be doing quite well one day, then sink into oblivion the next, and Nayib Bukele – the president of El Salvador – has experienced some criticism for tying his nation’s monetary protocols and procedures to such a speculative currency.
At the same time, the nation has long been dependent on USD, which is suffering heavily at the time of writing due to rising inflation. Thus, it looks like El Salvador may have the right idea in the long run. Removing itself from a fiat currency that generally isn’t working and placing itself in the hands of something new could wind up proving to be a solid decision when BTC returns to form.
In addition, El Salvador has also garnered negative attention from the likes of the World Bank and the International Monetary Fund (IMF). The former was initially asked to work with El Salvador to help implement its digital currency agenda. However, the enterprise said “no,” claiming that bitcoin was too volatile and too vulnerable to price swings to be taken seriously.
The IMF has also repeatedly worked to get the country to back down on its digital currency workings. Bukele has regularly refused this request. Now, it looks like the IMF has issued a statement on the matter, explaining:
Households and businesses who hold bitcoin balances and save in bitcoin could lose wealth through large swings in value. The adoption of bitcoin as legal tender is fully funded by public money through a trust fund. If the price of bitcoin was to plummet, the resources in the trust could be rapidly depleted.
In most circumstances, many leaders would arguably throw in the towel and admit defeat. They would say that their ideas didn’t work, and they would work to conform to the world’s present protocols, but Bukele has taken the opposite approach. Despite the dip and the many criticisms that he’s received in recent months, the President of El Salvador is now using this latest price debacle to purchase more bitcoin and add to the country’s balance sheet.
Recently on Twitter, Bukele announced that he bought roughly 500 additional units of bitcoin.