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HomeCRYPTOCURRENCIESHow the drop in Bitcoin has affected El Salvador • ENTER.CO

How the drop in Bitcoin has affected El Salvador • ENTER.CO

El Salvador was the first country in the world to legalize cryptocurrencies, bitcoin to be specific, as transactional currencies, something that has cost the government dearly. Thanks to investments in the purchase and distribution of cryptocurrencies, El Salvador has today lost enough to cover its next interest payment to bondholders.

According to Bloomberg estimates, the crisis that bitcoin is going through, falling 40% since the end of March, has contributed to the losses of the Salvadoran government’s holdings. Everything indicates that the project carried out by President Nayib Bukele has cost the country about $40 million dollars.

What can really be worrying for the Government and the country in general, is that its losses exceed the quota of its external debt. This currently reached $38.25 million dollars, with an expiration date of June 15. And it was not to be expected less; So far, the Bukele government has spent at least $105 million buying bitcoins.

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Since the government started buying digital currencies, the cryptocurrency (bitcoin) has fallen by 45%, reducing the value of bitcoins purchased (by $105 million) to about $66 million; this is equivalent to the 2,301 bitcoins that currently exist in the country.

In April of this year, the country had reported some $3.4 billion in reserves, according to the Salvadoran central bank. Likewise, the Government intends to raise $1,000 million dollars with the bitcoin-backed bond; however, we do not know if this will finally take place.

However, the data shown here are mostly estimates by Bloomberg as we mentioned. For its part, the government has not disclosed reports on the country’s current economy. The American portal tried to contact Bukele’s office but from there they rejected the request for comments.

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