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- El Salvador President Nayib Bukele seems un-bothered by the latest crypto crash as the country recently purchased 80 bitcoins.
- Bukele in the tweet all thanked the Bitcoin sellers for selling the asset at such low prices.
- Frank Muci, a policy fellow at the London School of Economics, says the country is moving into a debt default.
Recent crypto crash has given chills to even the strongest players in the industry such as Microstrategy. However one player hasn’t even flinched a bit, who is Salvadoran President Nayib Bukele. Bukele’s recent tweet is the proof. In a tweet published on June 30, the President revealed that the country has purchased 80 bitcoins at $19,000 each worth around $1.5 million.
Being all sarcastic, Bukele wrote “#Bitcoin is the future! Thank you for selling cheap.” The new purchase brought the total number of BTC owned by the state to 2,381.
A deep look in the tweet that contains a snapshot of Bitcoin purchases which looks like it have come from a centralized exchange’s website instead of over-the-counter (OTC) trading desk which is expected for such a large account, could provide more data. However, this points towards a more crypto custody solution and security. El Salvador has spent over $106 million, currently is down at 56% and trading at $49 million.
The bitcoin policy has influenced the polling numbers in the range between 85-90% approval ratings even though it is not very popular and reports show that the comparatively less citizens whio purchase with it and merchants who accept it.
El Slavador is in the midst of a war of gangs that has led to tens of thousands of detentions and arrests after a wave of violence.
According to Bloomberg reports, a potential default is hovering over the country whose bonds are trading at about 35 cents on the dollar, pretty close to Ukraine, which has been invaded by Russia.
Last week, in a statement to CNBC, Frank Muci, a policy fellow at the London School of Economics with experience advising Latin American governments on financial issues, called the economic policy of the country, “a magical thinking.”
Pointing to the “eye-gouging rates” that El Salvador is paying to borrow money on the bond market, Muci added, “They’ve spooked the bejesus out of financial markets and the IMF.
Muci also stated that the financial markets and the IMF are shocked looking at the rates that El Salvador is giving in exchange to borrow money on the bond market. Concluding, Muci said, “The country is sleepwalking into a debt default.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
