It’s been like a roller coaster ride for Bitcoin this past week. While Russia’s announcement of a ban on crypto mining and trading may put some pressure on the market, the SEC’s rejection of two more physically-backed Bitcoin ETFs is not good news either. As a result, Bitcoin is trading in a weak range of $35,000 and $36,000 at press time.
Bukele buys the embed
However, in the midst of the downward spiral, El Salvador President Nayib Bukele made another Bitcoin purchase. He announced that El Salvador bought an additional 410 Bitcoins for $15 million, adding to his crypto vault.
No, I was wrong, don’t miss it.
El Salvador just bought 410 yen #bitcoin for only 15 million dollars
You guys are selling really cheap 🤷🏻♂️ https://t.co/vEUEzp5UdU
– Nayib Bukele (@nayibbukele) January 21, 2022
Essentially, this means that Bukele bought each BTC for $36,585. The price range was last seen in June and July 2021. In response to the new addition, financial commentator Peter Schiff called it a “waste”. He speak,
“That means you wasted more than $36,500 per #Bitcoin. If you want to bet bad on #Bitcoin, do it with your own money. ”
Experts warn
On a number of occasions, the President has been criticized for using public funds to place risky Bitcoin bets. As a result, Schiff also asked Bukele to disclose his Bitcoin holdings along with the amount he lost. He further warned,
“I warned you not to buy the final soak. Do not buy next! ”
Because according to Schiff, “In the long run, [Bitcoin’s] price will be zero. So it’s all about short-term trades and timely exits. ”
Having said that, the government of El Salvador recently announced it plans to offer crypto-based loans to small and medium-sized businesses (small and medium-sized companies) by Q1 2022, as reported by Cointelegraph. the media.
But that being said, ratings agency Moody’s raised the country’s risk profile some time back. According to Bloomberg, Moody’s Investors Service noted that these Bitcoin transactions are raising the risk outlook for the sovereign credit of El Salvador. Moody’s analyst Jaime Reusche said:
“[Bitcoin holdings] certainly adding to the risk category… is quite risky, especially for a government that has struggled with liquidity pressures in the past. ”
Play with fire?
If Means of Estimate It is believed that El Salvador has added 410 BTC to its existing ownership of 1,391 Bitcoins. Reusche raised concerns that if the amount held exceeds this point, “it represents an even greater risk to the issuer’s solvency and financial profile.”
There have been some who have criticized El Salvador’s decision to accept Bitcoin as legal tender. In addition to the IMF raising concerns, economist Steve Hanke is also monitoring the country’s dollar-denominated debts. He recently commented,
“Nayib Bukele still hasn’t realized this as he continues to throw El Salvador taxpayer money on the Bitcoin fire. Speaking of fire, El Salvador’s dollar debt is on fire.”