On June 5, 2021, El Salvador passed a bill declaring BTC as the country’s legal tender, This news caused quite a stir in the financial field. From then on, the North American country will officially adopt BTC as legal tender and will invest a lot of money in this digital asset.
Soon after President Nayib Bukele passed the bill, the country began buying BTC in bulk.
The first purchase was made on September 6, 2021, the day before BTC officially became legal tender in El Salvador. The country bought a total of 400 BTC at a cost of $18.724 million at an average price of $46,811.
In the following months, Bukele ignored warnings from financial institutions such as the IMF and insisted on using the country's funds to invest in Crypto.
The second purchase took place on Sept. 7, and the country bought 150 BTC, spending roughly $6.9 million.
Since then, El Salvador has been buying BTC steadily and consistently. As of the last purchase on June 30, 2022, its total BTC reserves had reached 2,381, with an average price of $19,000, worth $1.52 million at the time.
However, El Salvador has not been profitable so far。
The country has spent a total of $103.23 million on BTC purchases since 2021, at an average price of $43,357. At current prices, El Salvador owns BTC worth about $61.3 million, meaning the country lost $40 million on BTC investments.
BTC has been operating as El Salvador’s legal tender since September 2021, allowing residents to use the digital asset to pay for goods and services. However, BTC adoption has not been as rapid as expected, as the U.S. dollar remains dominant in the country.
After the official announcement in 2021, many people protested,Said that the use of volatile digital assets as legal tender will bring economic risks. Even today, these controversies are still the focus of lawmakers.
In May, U.S. Senators James Risch, Bob Menendez and Bill Cassidy introduced a bill requiring El Salvador to report on the country’s adoption of BTC.
The bill, called the El Salvador Crypto Accountability Act, proposes to assess “risks to cybersecurity, economic stability, and democratic governance in El Salvador.”
President Bukele has yet to respond to the bill, which gives a 90-day window to submit the plan to a congressional committee involved in the matter.
On June 5 this year, Reuters reported that El Salvador, in cooperation with the private sector, plans to invest $1 billion in building a large BTC mine. Volcano Energy confirmed this, revealing thatThe country will spend the first $250 million on building one of the world's largest BTC mining farms。
