El Salvador decided to buy a bitcoin daily when the country has been facing several financial uncertainties.
Nayib Bukele, the president of El Salvador, announced that they would again purchase bitcoins. Nayib Bukele tweeted recently: “We’ll buy one bitcoin every day starting soon.” He should have specified how long this program would last.
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In September of 2021, El Salvador enacted a Bitcoin law. The country has acquired nearly $375 million worth of Bitcoins, but over $60 million in unrealized losses have been accrued.
We are buying one #Bitcoin every day starting tomorrow.
— Nayib Bukele (@nayibbukele) November 17, 2022
Bukele believes Bitcoin would help the country’s financial health and has been a strong cryptocurrency advocate. Additionally, despite being repeatedly warned to withdraw from their Bitcoin bet by the IMF and the World Bank, he has continued to persist.
El Salvador suffered a deadly blow from the drop in bitcoin prices last year. BTC has also been under immense selling pressure due to the FTX episode over the last week. However, President Nayib Bukele is confident enough to purchase more Bitcoin in the long run.
The China Axis and El Salvador
Nayib Bukele has not only acquired Bitcoins but has also been working to build a sustainable Bitcoin economy infrastructure. Furthermore, he expressed plans to establish a Bitcoin City and to issue Bitcoin volcano bonds.
According to President Bukele, Bitcoin-denominated volcano bonds can’t be used to repay the nation’s debt. According to Salvadoran economist Luis Membraño:
All top rating agencies have downgraded El Salvador’s credit line because of its ambitious Bitcoin plans.
It is expected that the country will default on its debt in January, according to rating agency Fitch. However, the country’s economy will continue to struggle due to a looming recession, rising inflation, and worsening fiscal conditions.
Economist Membraño suggested that El Salvador could request debt financing from China under the financial axis established by that country. “As a result, El Salvador’s foreign policy would be completely reoriented.” He said.
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