El Salvador to inaugurate pet hospital said to be funded with bitcoin-related gains

El Salvador will inaugurate a new public pet hospital this evening, funded by what its president Nayib Bukele has described as a surplus in a government trust fund caused by bitcoin’s rising value at the time. 

Bukele first announced the idea for the pet hospital on October 9 in a series of tweets, saying it would be built with a $4 million surplus in a trust fund the government had set up to help with its adoption of bitcoin as legal tender. While Bukele did give some details explaining how it was able to allocate these funds, many have since questioned how this mechanism works considering that El Salvador has not announced the sale of any Bitcoin. 

Bukele tweeted that the launch of the pet hospital will be broadcast live on Facebook, Twitter, TikTok and local news this evening at 8:00 p.m. local time. 

Local media noted earlier this week that the inauguration was originally planned for the evening of February 19, but the event was canceled without explanation. The website elsalvador.com published a screenshot showing a press conference announcement on that date via the presidential press secretary's Twitter account but reported that it had been deleted.

The animal hospital is located near the capital of San Salvador off a busy thoroughfare, in the municipality of Antiguo Cuscatlán. Construction of the building started in early November. Renderings have shown the building to have spaces for vet appointment consultations, operations, emergency services, rehabilitation and grooming among other services. Each service has a symbolic cost of 25 cents. 

El Salvador has so far purchased at least 1,801 bitcoins, based on Bukele’s tweets.

When Bukele explained how the trust functions in his initial tweets about building the pet hospital, he noted that the government was not selling any bitcoin, but instead “using the USD part of the trust”.

Over the past few months, several industry watchers have taken to analyzing what the country’s running bitcoin balance would be worth based on the average cost of the purchases and current bitcoin prices. One of these, El Salvador Bitcoin Portfolio Tracker, calculated on February 21 that the country would have had a loss of about $18.2 million based on market conditions at the time. 

Whether El Salvador is making additional gains through trading is largely unclear, in part because the public does not have access to its wallet address. During a January broadcast of the local television news program Frente a Frente, a viewer asked El Salvador’s finance minister Alejandro Zelaya how El Salvador could have Bitcoin gains without selling the cryptocurrency.

“There is always some kind of trading going on,” Zelaya responded, noting that when the president announced a $4 million surplus, it is because trading had happened.