I'm reading a fascinating long form account of El Salvadore's President Bukele. It mainly deals with his efforts to curb gang-related crime, but has this to say about his venture into Bitcoin:
https://mattlakeman.org/2024/03/30/notes-on-el-salvador/
Even Bukele realized that simply declaring Bitcoin usable in stores and for tax payments wouldn’t cause mass adoption. Despite his Austrian inclinations, he figured the state would need to help jump-start this new Bitcoin-fueled Salvadoran economy. First, he asked the World Bank for help, and it told him to fuck off. Instead, the regime mostly got help from crypto enthusiasts, such as Athena Bitcoin, a “comprehensive financial platform that facilitates the use of digital currency and electronic banking to power economies in need of access and inclusion,” which donated funds to help set up a network of Bitcoin ATMs. Strike CEO Jack Mallers was also a key figure in Bukele’s Bitcoin adoption.
...Bukele is often derogatorily referred to as a “crypto bro” or a “tech bro” with a “startup” mentality of “move fast and break things.” In that spirit, his regime has made a series of BTC purchases seemingly as pure financial speculation. The first buy of 400 BTC was made in September 2021, the day before Bitcoin officially became legal tender. Unfortunately, within 48 hours, the price of BTC fell from about $52,000 to about $43,000, likely due to speculators buying on the news (that making BTC legal tender will increase BTC buys and price) and selling on the event.
Bukele’s financial fortunes only worsened from there as he happened to buy BTC at the height of a cycle, and prices continued falling and flatlining for about two years. Bukele responded by doubling down again and again until the government-owned (as of writing this) 2,845 BTC at an estimated total cost of $121 million.
Critics breathlessly followed the disaster with periodic news articles celebrating the latest loses of the Salvadoran government’s fiscal reserves. Bukele was derided as a moron suckered into the never-ending global scam that is cryptocurrency. In early 2022, as the BTC cycle neared its bottom, El Salvador’s sovereign debt bonds took a dive. In negotiations, the International Monetary Fund demanded that Bukele revoke Bitcoin’s legal tender status. Bukele refused and managed to muddle through the crisis by scraping together $560 million to buy distressed national debt bonds off the international market as a show of confidence.
Apparently, El Salvador's breakeven price is $42,000. With bitcoin topping $72,000, they're now well into profit.
But the world's first experiment of a country having bitcoin as legal tender nearly got snuffed out by the Washington insiders at the International Monetary Fund.
Good for Bukele for not buckling under pressure. I honestly hope bitcoin goes to the moon just so El Salvador can sell a couple of coins and clear their dollar debts. That's the only way they'll escape from the pressures of orgs like the IMF.