Critics target El Salvador President Bukele as Bitcoin falls below $23,000 for the first time since December 2020.
According to Reuters, El Salvador’s Finance Minister Alejandro Zelaya downplayed the impact of Bitcoin’s crash on the country’s financial health.
Since El Salvador made Bitcoin legal tender, the price has dropped by 56%.
The issues began on June 13 at the start of Asian trading. Bitcoin was already vulnerable after the announcement of higher-than-expected US inflation data. However, rumors that cryptocurrency lending site Celsius had suspended withdrawals owing to an alleged liquidity issue sent prices plunging.
At its lowest point since June 12, Bitcoin had lost 25% of its value. Early on June 14, a bounce off the $20,800 mark provides some relief. However, market sentiment is firmly entrenched in acute anxiety.
Bitcoin was priced at $22,900 at the time of publication, representing an 18-month low.
In a news conference following Bitcoin’s precipitous drop, Zelaya stated that the scenario poses no financial risk to El Salvador:
“When they tell me that the fiscal risk for El Salvador because of Bitcoin is really high, the only thing I can do is smile”
Critics of El Salvador’s legalization of Bitcoin used the opportunity to attack President Bukele. For example, as the recent sell-off began, @mercadosyaccion tweeted that a loss of $38 million is “easy” to swallow when the funds are provided by the government.
“El Salvador accumulates as of today 06/12/2022 a loss of US$ 38 million for the purchase of 2,301 Bitcoin that its president Bukele has made with public funds.. Well .. How easy it is to make “highly speculative investments” with money that is not yours .. It’s easy.”
El Salvador has 2,301 BTC in reserves, with an average buy price of $30,744. At the present exchange rate, the country has unrealized losses of $17,980,00.
Concerns are growing that future Bitcoin price decreases may harm ordinary Salvadorans.
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