El Salvador's President Tries to Calm Nerves Amid Crypto Crash

El Salvador's Bitcoin-loving president Nayib Bukele is seeking to calm his people's nerves after the value of the cryptocurrency plummeted in recent weeks.

Bukele led the push to El Salvador becoming the first county in the world to make Bitcoin legal tender alongside the U.S. dollar in September last year, despite criticism from the International Monetary Fund (IMF).

His administration has since poured more than $100 million of public funds into purchasing at least 2,300 coins.

El Salvador has spent about $105.6 million in Bitcoin since last September, paying an average of almost $46,000 per coin, according to the tracking website nayibtracker.com.

But the value of the investment is calculated to have fallen by more than 50 percent, and now worth about $44.6 million.

Bukele took to Twitter in a bid to dispel concerns about the sharp drop in the value of Bitcoin, telling people that not only is their investment "safe," but will soon grow.

"I see that some people are worried or anxious about the #Bitcoin market price," he wrote on Saturday. "My advice: stop looking at the graph and enjoy life. If you invested in #BTC your investment is safe and its value will immensely grow after the bear market. Patience is the key."

El Salvador's Finance Minister Alejandro Zelaya has also dismissed concerns that a steep decline in the value of Bitcoin will harm the Central American country's fiscal health.

"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," Zelaya said, according to Reuters. "The fiscal risk is extremely minimal."

He also cited figures that the country's Bitcoin portfolio has lost about $40 million in value, saying that amount "does not even represent 0.5 percent of our national general budget."

Bukele jumped on a Bitcoin publication's reporting of the comments, tweeting: "You're telling me we should buy more #BTC?"

Newsweek earlier reported that El Salvador is facing a debt crisis unless an IMF financing package is delivered to help it repay a government bond worth $800 million due in January 2023.

The IMF has urged El Salvador to drop Bitcoin as legal tender due to its volatility and the possibility of criminals using the cryptocurrency.

"Efforts to improve financial inclusion are welcome, but Bitcoin use carries significant risks and Bitcoin should not be used as an official currency with legal tender status," the IMF said in a consultation document in January.

A woman buys in a store
A woman buys in a store that accepts bitcoins in El Zonte, La Libertad, El Salvador on September 4, 2021. Marvin Recinos/AFP via Getty Images