El Salvador’s Bitcoin Investment Struggles
El Salvador’s government invested in Bitcoin two years ago, but the investment is still underwater, with the president’s ill-timed buys contributing to the losses. The government currently owns 3,124 BTC worth $118.3 million, down 6.44% from the nation’s cost basis, and it’s hard to know the exact amount of BTC held by El Salvador. The president’s erratic buying patterns and attempts to “buy the dip” have not been successful, leading to losses. However, smaller, consistent investments in Bitcoin since November 2022 have helped recover some of the earlier losses.
El Salvador’s government invested in Bitcoin following its legalization as legal tender, but the investment has not been profitable, largely due to the president’s ill-timed purchases. The government’s BTC investments are currently underwater, with the nation’s holdings down 6.44% from the cost basis. Despite the president’s attempts to buy the dip and make small, consistent investments, the overall investment has struggled to bear fruit. On the other hand, MicroStrategy’s BTC investment has been substantially profitable, and the company’s BTC ownership is verifiable through its quarterly financial reports.
Insights and Questions:
Transparency in Investments
What are the implications of the lack of transparency surrounding El Salvador’s BTC investments? How does this compare to MicroStrategy’s verifiable BTC ownership through its financial reports?
Effectiveness of Investment Strategy
What lessons can be learned from El Salvador’s Bitcoin investment strategy, particularly in terms of trying to “buy the dip” and making small, consistent investments? How does this compare to MicroStrategy’s approach?
Leadership and Accountability
What role does leadership play in the success or failure of government investments, particularly in new and volatile asset classes like Bitcoin? How does this compare to private sector investments led by figures like MicroStrategy’s chairman?
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