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Investing.com – El Salvador was the first country in the world to adopt the as legal tender. Apart from the IMF, the World Bank has also warned against the move, as the already struggling budget could come under even more pressure if the local financial system fails to meet the demands of the cryptocurrency market.
President Nayib Bukele actually rejoiced with every dip in the price of BTC, as the country took the opportunity to buy other coins. But since the recent fall in prices, we no longer hear about it.
Business Insider reported that El Salvador is in possession of 2,301 bitcoins, acquired at an average purchase price of $45,908. The cryptocurrency portfolio therefore has a considerable deficit.
The president, however, does not seem to be worried about it. Bitcoin Magazine’s finding that the crypto deficit is 0.5 percent of the budget gave Nayib Bukele the idea of whether to buy more.
From the point of view of the rating agencies and the IMF, this is not a good idea. In the past, the introduction of BTC as legal tender has already led to several downgrades of the country’s credit rating. And if the government decides to increase the risk by buying more bitcoins, IMF financing of the country will become increasingly difficult.
In January, an $800 million loan will mature. Without short-term financing, the country will not be able to meet this payment obligation.
Peter Schiff pointed out to the president that it was better not to throw lost money behind you. Better an ending with horrors than endless horror.
By Marco Oehrl