El Salvador Bitcoin Strategy In “Dip” Trouble?

On May 9, El Salvador President Nayib Bukele tweeted that his country is buying the dip in bitcoin prices, getting 500 more Bitcoins. It was the largest Bitcoin deal of all announced by the President. The El Salvador government has not revealed the total amount of Bitcoin it holds, but Nayib Bukele sometimes shares the details of Salvadorian cryptocurrency acquisitions with his followers on Twitter.

However, It’s not the first time that President Bukele has boasted about buying into the dip. The previous big deal took place in January 2022, when the price of Bitcoin was $36,585. The country exchanged $15,000 for 410 Bitcoins.

Before that, the Salvadoran government “bought the dip” at the price of $54,108 for one Bitcoin, getting 100 of them.

Looks like the President is a gambling type. After all, one should dare to accept a risk when they approve of cryptocurrency at the state level. Let’s just keep in mind that 6.5 million people depend on this game.

Lately there has been a streak of bad luck for the Salvadorian budget. El Salvador’s Bitcoin holdings have been hard hit by the ongoing crypto market pullback, from $38k in April to the local low of $27,400 set yesterday, May 18th.

“When he buys there’s always a bigger dip”, shared former El Salvador Central Bank Chief Carlos Acevedo.

May 9 Bitcoin price, when President Bukele made the latest announcement of buying the dip

According to a report by Bloomberg, El Salvador’s Bitcoin holdings have lost value by approximately $40 billion due to the ongoing crypto-wide pullback. Furthermore, the unrealized losses are almost equivalent to El Savaldor’s next coupon payment on its debt for the month of June, worth $38.5 million.

Since the government doesn’t publish data on its Bitcoin holdings, we can only guess at the current losses of the Salvadorian budget. Still, the president considers that the cryptocurrency will have a “giant” increase in its price sooner rather than later, and that “it is only a matter of time” for that to happen. I hope he has assembled a decent team to weather the storm.