As Bitcoin continued its fall to $30,000 this week, El Salvador’s President Nayib Bukele saw this as an investment opportunity and added 500 coins to government coffers. The pro-crypto country’s total Bitcoin reserve is estimated to be 2,301 BTC, or approximately $73 million.
President Bukele took to Twitter to announce the purchase at an average price of about $30,744, which accounted for a total of $15.5 million. Salvador’s recent Bitcoin investment is already in profit even with the price correction in the crypto market. At press time, Bitcoin stood close to $32,000.
IMF Opposes El Salvador’s Bitcoin Stance
Earlier this year, President Bukele revealed that El Salvador bought 410 Bitcoins for $15 million. Following Bukele’s tweet, the Executive Board of the International Monetary Fund (IMF) urged the country’s authorities to “narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status”. The IMF asserted that the adoption of a cryptocurrency as legal tender may result in potential risks for financial and market integrity, financial stability, and consumer protection, and can create contingent liabilities.
Furthermore, the IMF’s executive directive emphasized the need for strict regulation and oversight of the new Bitcoin ecosystem. Along with highlighting risks against financial stability and consumer protection, the directors also expressed concern over the risks associated with issuing Bitcoin-backed bonds.
Meanwhile, last month, due to the Ukraine-Russia crisis, El Salvador postponed the launch of its $1 billion Bitcoin volcano bonds. Salvadoran Finance Minister Alejandro Zelaya confirmed the postponement of Bitcoin bonds until the country’s government saw favorable market conditions, noting that “now is not the time to issue the bond”. He pointed out that the former half of 2021 was a favorable period to launch these bonds as opposed to the current situation that poses high uncertainty.