President Nayib Bukele of El Salvador announced on Nov. 16 that the Central American country will start buying BTC daily on Nov. 17. The announcement comes nearly three months after the country last bought BTC in July 2022.
we are going to buy one #bitcoin Every day starting tomorrow.
— Nayib Bukele (@nayibbukele) November 17, 2022
El Salvador began buying bitcoin in September 2021, when it became legal tender. At the time, BTC was in the middle of a bull market, and every purchase across the country looked profitable as prices hit new all-time highs every other week. However, with the bear market looming in the second quarter of 2022, El Salvador’s early BTC purchases are starting to look like a disastrous gamble.
According to public records, El Salvador currently holds 2,381 BTC with an average purchase price of $43,357. As a result, the country has spent nearly $103.23 million in BTC, while the value of the same BTC is currently $39.4 million.
Announcing a new BTC buying program at a time when the top cryptocurrency is at a new cycle low could help El Salvador offset some of its losses in the coming months.
In addition to the losses small countries suffer when buying BTC, the top cryptocurrency has played a major role in helping to significantly reduce the cost of sending money across borders, while also boosting tourism.
Cointelegraph reporter Joe Hall is currently on the ground in El Salvador, surviving on BTC alone. Some early updates from Hall indicate that most tourist attractions accept BTC, but the mobile app and services need more improvement.
Lunch at El Navegante one afternoon
Huge logo: #bitcoin Accept here ⚡️
waiter wearing @strike T-shirt, Chef wears a Strike hat (srsly).
Tried to pay bills. Waiter spent 15 minutes looking for PoS.
He made his neighbor light up the Chivo so I could pay for it♂️ pic.twitter.com/9HaHG8qclQ
— Joe Nakamoto (@JoeNakamoto) November 14, 2022
The prospects for BTC adoption in El Salvador may be less optimistic due to the severe winter. However, looking at the history of Bitcoin price cycles, the country can easily offset the losses of the next bull cycle by simply holding Bitcoin to buy.