Crypto Crash: El Salvador Loses $40 Million Amid High Bitcoin Volatility
El-Salvador, a country in Central America reported that due to the recent fluctuation of the cryptocurrency, Bitcoin, it has bagged numerous losses leading to about $40 million as noted by Bloomberg in a recent report. The losses are estimated to equal the next bond payment of $38.25 million by the country.
El Salvador’s president, Bukele recently bought the Bitcoin dip
The losses began at the end of March and it has gone further to about 40%. As noted by Bloomberg, the losses have further increased, and picture the alarming risks of the investment in Bitcoin by EL Salvador.
Meanwhile, this information is coming after El Salvador’s president, Bukele took to his Twitter handle on 9th May to announce that the El Salvador has purchased 500 bitcoins at the price of $30,744. He tweeted ” El Salvador just bought the dip. 500 coins at an average USD price of~$30,744″
Furthermore, shortly after the tweet by El Salvador’s president, Bukele, Justin Sun, Tron founder announced via his Twitter handle on 10th May that following the purchase by El Salvador, they have also acquired 500 coins for $15,515,675 with a single coin at 31031.35.
El Salvador’s Journey With Bitcoin
On September 7th, 2021, President Bukele of El Salvador announced that Bitcoin can be used for performing financial transactions. El Salvador then was flagged as the first country worldwide to pass a law that allows its citizens to use Bitcoin when performing business transactions.
President Bukele noted that Bitcoin as El Salvador’s legal tendency will encourage a faster flow of transactions between El Salvador and other countries. Furthermore, the decision will help El Salvador quickly settle its foreign debts.
Meanwhile, the decision by President Bukele wasn’t widely accepted as the IMF, the International Monetary Funds, cautioned the El Salvador government on the risks involved in enabling Bitcoin as the Legal tendency in the Country. They further stated that getting a loan from them will be a mission impossible.
IMF further noted that the use of Bitcoin poses huge risks to the financial integrity, financial stability, and consumer protection.
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