The recent drop in the value of the most popular cryptocurrency, Bitcoin, has impacted retail and institutional investors and a small country – El Salvador – that had embraced the digital asset as a strategy to bolster its poor economy.
As per tweets from El Salvador’s Bitcoin-loving president Nayib Bukele, the nation has purchased at least 1,391 bitcoins using public dollars. According to the media, based on an average purchasing price of $51,056 per coin, the purchase would have cost El Salvador roughly $71 million. If the government has kept the digital coins, they are now worth roughly $61 million, a loss of 14%.
Since hitting an all-time peak in November, the price of bitcoin has dropped by around 40%. Last week, the cryptocurrency fell below $40,000 for the first time since September, with losses spreading throughout the entire digital currency market. Bitcoin was trading at $43,765 per token on Thursday.
In June 2021, El Salvador’s legislature authorized the use of Bitcoin as legal money. President Bukele declared later in September that his administration had acquired its first 400 bitcoins. The country intends to fuel its crypto-mining operations using various renewable energy sources.