- Since El Salvador made Bitcoin legal tender, BTC has lost approximately 56% of its value.
- Alejandro Zelaya, Minister of Finance of El Salvador, dismissed any concerns regarding the impact of the BTC price drop on the nation’s fiscal capacity.
- Minister Zelaya stated that the fiscal risk for El Salvador from Bitcoin is extremely minimal.
It seems that the Central American country is one of the few Bitcoin (BTC) investors that claims not to have suffered losses on their holdings in the leading crypto after this week’s crash.
It is necessary to bear in mind that, since El Salvador turned Bitcoin into legal tenderit has lost approximately 56% of its value and Predictably, concerns regarding the country’s economic situation began to surface.
Finance minister dispels doubts
In accordance with Reuters, Alejandro Zelaya, Minister of Finance of El Salvador, dismissed during a press conference any concern regarding the impact of the BTC price drop on the fiscal capacity of the nation.
Zelaya declared that when he is questioned about the high fiscal risk for El Salvador for Bitcoin, he only smiles, since tax risk is extremely minimal and the minister assured that “any serious economist should feel the same way because it really is a very superficial analysis and they speak only from ignorance.a”.
But can they really be blamed for worrying? Namely, El Salvador has suffered an approximate loss of $38 million US dollars due to the drop in the price of Bitcoin, even thus Zelaya argues that El Salvador has lost absolutely nothing.
El Salvador, a Bitcoin investor without losses?
If El Salvador made their first purchase of BTC at a price of around $60,000 USD, how is it possible for Zelaya to claim that they have not experienced any losses?
Well, the finance minister embraces the possibility that the price of Bitcoin will rise again and even exceed the price of its initial purchase, and not having sold a single cryptocurrency, there has been no loss, and yes, in theory the loss is realized once it is sold below the purchase price. However, in reality, that money is only recoverable if the nation manages to sell at a higher price one day.
In addition, Zelaya assures that “forty million dollars does not even represent 0.5%” of the nation’s general budget and, therefore, there should be no type of fiscal concern.
Governments criticize Bitcoin, not El Salvador’s strategy.
The arguments of Zelaya and President Bukele do not seem to convince international organizations. In fact, US lawmakers have bills in the works aimed at protecting their economy from El Salvador’s “sloppy bet.”
In any case, Zelaya said during the conference that “there is a clear criticism of Bitcoin as such” and not towards the strategy of El Salvador.
“The media don’t care what happens to our economy, they don’t care what happens to our people, what happens to inflationZelaya emphasized.
El Salvador is not the only Bitcoin holder remaining calm in the face of the recent price drop. Michael Saylor, CEO of MicroStrategy, assured that the company can withstand the Bitcoin price continuing to fall without any problem.
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