Nayibtracker, a platform monitoring El Salvador’s Bitcoin holdings, reports that the Central American country has experienced nearly $20 million in unrealized losses in its Bitcoin investment. While the price of Bitcoin recently rose to $35,000, the country still faces losses from its investment.
Nayibtracker, estimates El Salvador’s total Bitcoin investment at around $124 million, with an average acquisition cost of approximately $40,594 per BTC. Given that the current price of Bitcoin is around $34,442, the country’s investment is confronting a significant loss.
The price of Bitcoin reached a yearly high of $35,000 on October 23, likely due to increased investor optimism surrounding the possible approval of a spot Bitcoin ETF by the SEC.
Despite hitting a yearly high on October 23, Bitcoin is still trading about 50% below its all-time high set in November 2021. During this period, President Nayib Bukele of El Salvador spearheaded the adoption of Bitcoin as legal tender and began purchasing the cryptocurrency for the country’s treasury.
Although El Salvador has adopted Bitcoin as legal tender, it has encountered several challenges in implementing this policy.
An Ark Invest report found that most Salvadorans still prefer using the U.S. dollar for transactions, despite Bitcoin’s status as legal tender in the country.
“The citizens of El Salvador prefer to transact in USD, which became legal tender in El Salvador in 2001 and has protected purchasing power from the inflation and devaluations that have ravaged other countries in the region,” Ark Invest’s David Puell wrote.
However, El Salvador’s vice president, Felix Ulloa, has argued that the country’s adoption of Bitcoin has positively impacted its economy. He claimed that the move has attracted new investors and improved El Salvador’s global standing.
El Salvador’s embrace of Bitcoin has piqued the interest of the crypto community, with several crypto companies, including Bitfinex and Strike, taking steps to engage with the country. Bitfinex recently produced a documentary on the country’s BTC adoption, while Strike relocated its headquarters from Chicago, U.S., to El Salvador.