Not long ago, El Salvador became the first country in the world to make bitcoin as the legal tender of nation. Even though the government received a lot of criticism and backlash from experts around the world, the president Nayib Bukele went ahead made the decision.
After the crypto market crash, there have been serious complications in the market regarding to the value of cryptocurrencies. The prices are diminishing to an extent, from were getting back them to something worthy enough of trade would take years. Bitcoin which happens to be the most used, most popular and most valued cryptocurrency across the world, also lost its value and was reduced to as low as $24000 from its peak at $69,000.
Such a reduction in the price of bitcoin surely makes a big dent on El Salvador’s economy as bitcoin is the legal tender currency of the nation. Even though, it is clear that the nation is going to lose millions of dollars, the finance minister, Alejandro Zelaya ignorantly acknowledges that, “An alleged loss of $40 Million has not occurred because we have not sold the coins.”
According to Nayib Bukele Tracker, the estimated loss is at 51%.
Nayib Bukele Tracker, which happens to track all the bitcoin purchases made by the government, estimates that the reserves of the nation have lost at least 51% of their value. The tracker shows the transactions that the government does for the trade of bitcoin, which also estimated that Bukele spent a total of $105.6 million on 2,301 bitcoins with the average cost for acquiring the bitcoin at $45,908.
The dream of bitcoin city to be shattered?
In May, Nayib went on to tweet about the bitcoin city of El Salvador. Lets look the tweet below.
Though, the project started with promising results, the current situation of bitcoin is surely persistent enough to shatter the dreams of Nayib Bukele’s bitcoin city.
Every big company dealing in bitcoin is in loss.
It is also observed that, all the major players of bitcoin are facing a slush of losses, as the value of bitcoin continues to diminish. MicroStrategy led by Michael Saylor bitcoin purchase which was worth $4 billion is now reduced to $2.9 Billion. Tesla, which holds approximately 42,000 BTC, has also seen the gains of the currency disappear in thin air.
Many cryptocurrency dealing companies, and crypto exchanges such as Coinbase, Gemini are resorting to cut the workforce to save costs and plan to run the business in the most efficient way to counter the volatile nature of the market.