El Salvador's president buys another 410 BTC as the price plummets

While short-term BTC holders complain of significant losses, Nayib Bukele is adding another 410 BTC to the country's holdings, which now amount to over $ 70 million.

The crypto market cap has seen a drop of more than 12% in the past 24 hours, and El Salvador has bought more bitcoins. The Central American country bought 410 BTC worth around $ 15M to add to its growing reserve. There is no official government statistic on how many bitcoins it owns, but estimates are around 1.801 BTC. Before making bitcoin legal tender in 2021, the government added 200 BTC to its reserves, making the total owned 400 BTC. The US dollar is also legal tender. In September 2021, President Nayib Bukele bought 150 BTC, in October 2021, 420 BTC, in November 2021, 100 BTC, and 22 BTC on December 21, 2021. The government issued $ 30 worth of BTC in a 4 Chivo wallet. millions of citizens, which Bukele declared to be active users on January 19, 2022.

Buying more bitcoins is risky, says Moody's

Bukele is a firm believer that remittances are a crucial way bitcoin helps the country's remittances, but others disagree. Moody's Investor Services is concerned about the risk posed to El Salvador's financial stability if it were to accumulate more bitcoins. He believes El Salvador's weak sovereign credit outlook won't be helped by bitcoin. Of the country that trades bitcoin, Moody's Jamie Reusche said it "is quite risky, particularly for a government that has struggled with liquidity pressures in the past." Even though the government only owns about $ 70 million worth of bitcoin, which isn't significant as far as financial stability is concerned, Reusche believes that more purchases could further jeopardize stability.

Bukele predicted that two more countries will make bitcoin legal in 2022 and that bitcoin will greatly affect this year's US elections. Bukele did not make friends with the International Monetary Fund, which he asked for a $ 1B loan. The IMF criticized Bukele's attempt to make El Salvador the first bitcoin economy.

Bitcoin bonds to raise money

El Salvador's finance minister recently presented 20 bills to parliament that contain a legal framework for the country's upcoming bitcoin bonds. The bonds, set to raise $ 800 million, already have $ 300 million in commitments. Half of the revenue generated by government-issued bonds will be used to buy more bitcoins and finance the new tax-free bitcoin city, while the other half will be used to finance bitcoin mining.