El Salvador and the Bitcoin Price Slump, Is BTC Still a Worthy Investment?

The massive price slump in the digital currency ecosystem and particularly Bitcoin (BTC) has notably caused enormous pain for both retail and institutional investors. However, El Salvador, the only country in the world where Bitcoin is officially a legal tender, also has its wounds to lick based on its BTC holdings.

Since the country legalized Bitcoin back in September 2021, President Nayib Bukele is known to always buy the dip, a purchasing spree that is made at the time when the cryptocurrency is experiencing massive corrections. 

At the moment, El Salvador has as many as 1,391 BTC units which it purchased at intermittent times and at an average price of $51,056 per coin. The country’s holdings which are worth $71 million at the average price have notably slumped to $60.7 million at the current price of $43,654.59 per Bitcoin according to CoinMarketCap.

This qualifies for a bad trade as more functional critics – other than Vitalik Buterin – are hammering on the $10.27 million loss, one that seems so bogus for the Central American nation. One of such critics is renowned economist, Steve Hanke who shared a tweet alleging that President Bukele is plunging the nation into debts.

“#Bitcoin is a volatile, speculative asset. Nayib Bukele is yet to realize this as he continues to throw El Salvadoran taxpayer money into the Bitcoin fire. Speaking of fire, El Salvador’s dollar-denominated debt is in flames,” he said.

Is El Salvador Bitcoin Purchase a Mistake?

Just like any other financial asset, Bitcoin is experiencing a tumultuous period, the same way the Dow Jones and the S&P 500 amongst other indices are experiencing. For the broader financial world, 2022 opened with a bearish turn that has seen many assets shed their valuations. 

Despite the criticism of President Nayib Bukele, so many supporters, particularly, proponents of Bitcoin and its underlying technology believe keeping the country’s funds in Bitcoin is still a more worthy investment than holding it as cash. 

As popularly alluded to, the only losses incurred come when a Bitcoiner sells out his holdings, and as long as El Salvador continues to HODL its lot, the chances to regain its investment with extra profit over time is very high. However, the country has notably been enjoying the dividends of its decision to favor Bitcoin as proceeds from the coin have been earmarked to build a veterinary hospital and about 20 schools in the country.