September 7th, 2021 — El Salvador adopted Bitcoin as its legal tender, making El Salvador the first country in the world to adopt cryptocurrency as a legal payment method. This event allowed El Salvador’s citizens to use Bitcoin in any transaction from buying products to paying for services and taxes. Such adoption was followed by increased access to financial services all around El Salvador, an increase in foreign investors, and a spike in tourism.
Since the beginning of 2022, most of the big cryptocurrencies had seen a rapid fall in price, which was later followed by the crypto-market crash. Despite the losses in the Bitcoin investment, El Salvador’s President remained positive about the events and even supported buying more Bitcoin while it was falling. The newly acquired Bitcoin was combined with the 420 BTC which was bought on 27th October last year.
Source: Nayib Bukele’s Twitter account
El Salvador’s investment in over 2,300 BTC has lost over 50% of its original value. Even after such a big loss, the President of El Salvador, Nayib Bukele was bullish about the market. Furthermore, El Salvador Minister of Finance, Alehandro Zelaya stated:
"We aren't going to have results overnight. We can't go to bed poor and wake up millionaires [...] New technologies have shown how people in previous years were afraid of things like websites and digital business, but it's been shown through time that reality imposes itself [...] For some, it's something new and something they don't entirely understand, but it's a phenomenon that exists and is gaining ground and will continue to be around in the coming years."
While the March plan of investing over 1 billion USD into bitcoin was postponed due to unfavorable market conditions and Bitcoin lost over 65% of its highest value in June, El Salvador’s official disregarded the concerns stating that the financial risks were minimal.