The first nation to legalize BTC inside its borders sits on a substantial unrealized loss from its bitcoin stack. However, its Finance Minister, Alejandro Zelaya, reassured that the most recent market crash will not hurt the country’s fiscal health.
The small Central American country made history approximately a year ago when it announced plans to adopt the primary cryptocurrency as legal tender during the Miami Bitcoin Conference.
The move became official in September, despite some local criticism and backlash from global financial organizations, like the IMF.
Since then, El Salvador and its leaders have undertaken numerous pro-BTC initiatives, including announcing plans for a Bitcoin City and purchasing over 2,301 bitcoins. The last acquisition came during the mid-May market pullback when the country spent $15.3 million to buy 500 BTC.
This time, though, the situation seems a bit different. BTC plummeted hard in the past week or so, losing almost $10,000 in the process to a multi-year low of $20,800 tapped earlier today.
El Salvador is yet to announce a bitcoin purchase. However, the nation’s Finance Minister said at a press conference that the market crash has not increased the financial risks of the BTC adoption.
“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. The fiscal risk is extremely minimal.”
In light of recent estimations saying El Salvador has an unrealized loss of $40 million in its BTC investments, Zelaya noted that this amount represents less than 0.5% of the country’s national general budget.
While El Salvador’s unrealized BTC loss is a more modest $40 million, MicroStrategy’s position is substantially more harmful. The business intelligence giant, the largest corporate bitcoin holder, sits on an unrealized loss of around $1 billion on its BTC position.
As CryptoPotato reported yesterday, the company has spent roughly $4 billion to accumulate its stash of almost 130,000 coins. However, due to the recent market downtrend, these holdings’ value is approximately $3 billion now.
Nevertheless, the firm’s CEO and founder is still bullish on BTC, refuting any assumptions that MicroStrategy will sell any of its bitcoins.