El Salvador faces significant paper losses after a year of buying bitcoin

Quick Take

  • El Salvador made bitcoin legal tender alongside the U.S. dollar one year ago.
  • The country’s bitcoin portfolio has lost about 58% of its value on paper, based on average purchase price and bitcoin’s value earlier on Sept. 7.
  • The unrealized losses are estimates and may not reflect the exact amount the government is holding.

El Salvador placed a big bet on bitcoin exactly a year ago, making it an official legal tender alongside the U.S. dollar and filling its coffers with the cryptocurrency in a series of purchases. However, the country appears to be facing significant losses related to its bitcoin buys, at least on paper. 

El Salvador's bitcoin portfolio is down about 58%

The public does not know exactly how much bitcoin El Salvador is holding right now, as the government has not made this official data public. But based on the bitcoin buys El Salvador's President Nayib Bukele has disclosed on Twitter since last September, the country has purchased 2,381 bitcoins. If it is still holding onto all of those, El Salvador's portfolio would be down about 58% based on the average purchase price of the assets compared with current bitcoin prices. 

Source and methodology: Data calculated using a combination of information shared by El Salvador's President Nayib Bukele through Twitter, and bitcoin daily averages on the day of purchasing from Blockchain.com (where the purchase price wasn’t shared by the president). Amounts calculated using a bitcoin price of $18,930 from earlier on Sept. 7. Methodology based on the Nayib Bukele Portfolio Tracker

Only an estimate 

While the public assumed for the better part of the year that El Salvador has been hanging on to all of its bitcoin, finance minister Alejandro Zelaya revealed during a June interview that the country had sold some to fund the Chivo Pets pet hospital project. However, he maintained that the government was holding onto its bitcoin as a general strategy.

Bukele had said in October the project would be funded with part of a $4 million "surplus" in a government trust fund based on bitcoin's rising value at the time, and that it was not selling any crypto for the project. So, the exact amount the government may have actually sold is unclear.

 

Follow the tweets

The above data is based on Bukele's tweets about purchasing bitcoin throughout the year. One site that has been tracking the purchases, the Nayib Bukele Portfolio Tracker, estimates that the country had spent more than $107 million on bitcoin and lost more than $61 million, based on the current price of the cryptocurrency. 

El Salvador bitcoin purchases, based on Bukele’s tweets

June 30, 2022 - 80 BTC 

May 9, 2022 - 500 BTC 

Jan. 21, 2022 - 410 BTC 

Dec. 21, 2021 - 21 BTC

Dec. 4, 2021 - 150 BTC 

Nov. 26, 2021 - 100 BTC

Oct. 27, 2021 - 420 BTC

Sept. 19, 2021 - 150 BTC 

Sept. 7, 2021 - 150 BTC 

Sept. 6, 2021 - 200 BTC  

Sept. 6, 2021 - 200 BTC (first purchase)

Source: The Block's analysis of Bukele’s tweets relating to bitcoin purchases.

 

 

 


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Kristin Majcher is a senior correspondent at The Block, based in Colombia. She covers the Latin America market. Before joining, she worked as a freelancer with bylines in Fortune, Condé Nast Traveler and MIT Technology Review among other publications.