- El Salvador’s Bitcoin reserve is now at a loss of $ 12 million since the country adopted Bitcoin 4 months ago.
- Meanwhile, MicroStrategy has posted a 44% gain, but there are some uncertainties in the future.
It’s been four months since El Salvador became a cryptocurrency legend by making Bitcoin (BTC) a legal tender. But four months later, the country is counting on millions of dollars in losses from its Bitcoin reserves.
Led by President Nayib Bukele, the Central American nation is buying digital assets strongly, especially during price cuts. At the time of writing this report, its reserve held 1,391 units of the crypto asset. In total, the country’s Bitcoin purchases cost him $ 73.2 million, as most of the purchases were made when BTC was worth more than $ 50,000. At press time, however, it was worth about $ 42,000 BTC, after accumulating red bars late. This is the value of El Salvador’s Bitcoin stock at $ 60.7 million, a significant loss of $ 12 million.
Uncertainty Hangs Above Bitcoin Stash El Salvador
However, these figures are questionable as some details about investing in cryptocurrencies from El Salvador are not public. For example, Finance Minister Alejandro Zelaya said the country had liquidated some of its BTC reserves for the dollar. It left out information on exactly when these transactions took place and the specific amount of Bitcoin sold.
In addition, the address where the El Salvador crypto is located is a mystery to the general public. Therefore, it is almost impossible to track your purchases and sales.
Technology entity MicroStrategy, led by Michael Saylor, is another entity that is proud to be part of the «Buy the dip» bandwagon. Since the end of 2020, the firm has taken every opportunity to accumulate more Bitcoin. For one thing, all cash not required for a company’s operations must be retained in the digital asset, under policy 2020. The company has also repeatedly issued convertible notes to increase its purchasing power.
At the end of 2021, MicroStrategy had a total of 124,391 BTC, which it bought for a total average of $ 3.75 billion. Unlike El Salvador, its holdings are now worth $ 5.42 billion, after generating 44% gains over time. Interestingly, MicroSstrategy is valued at $ 5.33 billion according to MarketWatch, a few million less than its Bitcoin holdings.
BTC Hunger Future
Saylor previously said that Bitcoin is «going up forever» and will never sell the company’s BTC. His comments drew praise from crypto enthusiasts and criticism from bandits.
That said, the company may be forced to take some action if the price of BTC falls below $ 30,153. At this point, MicroStrategy will join El Salvador to deal with losses. For the company, this could be a problem given its debt obligations. For El Salvador, confidence in Bukele’s crypto plans, including Bitcoin City, may decline. However, both can make progress if cryptocurrency market prices change positively, which would silence both critics and skeptics.