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El Salvador’s Fiscal Risk Is Extremely Minimal Despite BTC’s Crash, Says Finance Minister

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The first country to legalize BTC within its borders suffered significant unrealized losses from its bitcoin stack. However, Finance Minister Alejandro Celaya assured that the recent market crash would not hurt the country’s financial health.

Don’t worry in El Salvador

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The small Central American country made history about a year ago when it announced plans to adopt a major cryptocurrency as legal tender during the Miami Bitcoin Conference.

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The move became official in September despite some local criticism and backlash from global financial institutions such as the IMF.

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Since then, El Salvador and its leaders have taken numerous initiatives in support of BTC, including announcing plans for a Bitcoin City and acquiring over 2,301 bitcoins. The latest acquisition came during a market crash in mid-May, when the country spent $15.3 million to buy 500 BTC.

However, this time the situation seems to be somewhat different. BTC has fallen heavily in the past week or so, losing almost $10,000 in the process to a multi-year low of $20,800 hit earlier today.


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El Salvador has yet to announce the purchase of bitcoin. However, the finance minister said at a press conference that the market crash did not increase the financial risks of BTC adoption.

“When I am told that the financial 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 estimates that El Salvador suffered an unrealized loss of $40 million from its investment in BTC, Zelaya noted that this amount is less than 0.5% of the country’s national budget.

Bitcoin and Sailor’s microstrategy

While El Salvador’s unrealized BTC loss is a more modest $40 million, MicroStrategy’s position is significantly more precarious. The business intelligence giant, the largest corporate holder of bitcoin, is incurring unrealized losses of around $1 billion on its BTC position.

As Crypto Potato As reported yesterday, the company has spent about $4 billion accumulating nearly 130,000 coins. However, due to the recent market downturn, the value of these assets is now around $3 billion.

However, the CEO and founder of the firm remains bullish on BTC, dismissing any suggestion that MicroStrategy will sell any of its bitcoins.

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Credit : cryptopotato.com

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