Is El Salvador’s ‘Bitcoin plan’ really paying off?

Today it is impossible to talk about El Salvador without mentioning Bitcoin, and vice versa. Since the Central American country turned cryptocurrency into legal tender, there has been a permanent stir around that decision and the consequences —both positive and negative— that it could bring in the future. And everything goes hand in hand with the figure of the young Salvadoran president Nayib Bukele.

Bitcoin began to function as legal currency at par with the US dollar in El Salvador in September 2021; and although the measure has generated a lot of curiosity, there are still several issues that are not too clear in this story. Among them, what results has the nation achieved since it started buying the digital currency in quantities.

in the last hours Bloomberg published a report analyzing the performance of the investment in Bitcoin made so far by the Nayib Bukele government. The conclusion of the aforementioned medium is that El Salvador has probably lost money, and there are reasons to think that this reading is accurate (the fall in the price of the crypto, without going any further); but it is also true that the plot has several grays that do not allow us to know with absolute precision what the panorama of this initiative is.

The report shows that from September 6 of last year to date, El Salvador has bought 1,391 bitcoins. It is worth noting that there are no public records of each purchase other than Nayib Bukele’s tweets reporting the transactions in his personal account. Until now, the Salvadoran authorities have carried out 8 transactions for an amount greater than 70 million dollars; that, according to the price of Bitcoin at the time of each acquisition.

The largest purchase in a single day was on October 27: 420 bitcoins at an average value of $58,630 each, for a total investment of $24.6 million. The smallest was that of last December 21, the last of which there is mention, when El Salvador obtained 21 bitcoins in exchange for one million dollars, paying an estimated price of $49,258 for each one.

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