Crypto Analytics

El Bagholder strikes again

We all complain about politicians. But spare a thought for the people of El Salvador, whose sharp-eyed crypto-brother president is day-trading an already troubled country into even greater poverty.

Here’s the latest from Nayib Bukele. As a reminder, this is the President of one of the poorest countries in the world, not a spotty Reddit dealer who picked up mushrooms while watching videos of Michael Saylor and decided to give the “Cyber ​​Hornets serving the Goddess of Wisdom“.

The story of El Salvador’s move to Bitcoin has been well told many times – car accidents always attract rubbernecks, and it’s not often you see the accident before it happens – but we were curious how bad its P&L was now.

After spending an unfortunate few hours searching Bukele’s Twitter account, we believe we’ve found all of the official purchases for a total of 2,280 bitcoin since the first 200 announced on September 6, 2021, the day before bitcoin became official became legal tender in El Salvador. A day later, “El Hodlador” said he had already bought another 200.

In some cases, Bukele disclosed the average purchase price. For the others, FT Alphaville simply took the price on the day of the announcement as a reasonable surrogate for the cost. Bitcoin purchases totaling 150 coins were not announced on Twitter, only announced on the frame El Salvador’s Hideout. And of course, we don’t know what the country actually holds for itself at the moment and how much may have “leaked”.

But taking the announcements at face value and with the assumptions mentioned, we found that El Salvador spent about $101.5 million on its 2,280 bitcoin. Though Bukele hilariously brags about already making a profit on yesterday’s purchases, his crypto trove is worth $72.6 million at pixel time

A country with a per capita GDP of $3,799, reserves of less than $4 billion (equivalent to just three months of imports, which is usually considered a danger level) and a government debt of over $13 billion (approx 85 percent of GDP) has lost about $28.9 million on its crypto punts over the past six months.

Here’s a chart showing the dismal trajectory of the world’s first sovereign bitcoin bag holder.

Of course, the Bitcoin brothers will be screaming that El Salvador-acquired Bitcoin will prove a bargain as the cryptocurrency eclipses gold and even the US dollar. It seems Bukele remains popular domestically, although it’s largely thanks to the taming of violence. (That already appears to be reversing after a truce between gangs and the government was broken).

The IMF has already made a clear statement. The market’s take on El Salvador’s Bitcoin weaknesses is also pretty clear: a country that was likely bankrupt is almost certainly bankrupt now.

El Salvador’s Discussed “Bitcoin Bond” Looks DOA But here’s the price of its $800 million bond, which matures next January. Despite maturing in less than a year, it’s trading at 76.9 cents on the dollar. This results in a return of over 50 percent.

Source: Crypto News Austria

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