President of El Salvador Nayib Bukele must truly believe in Bitcoin—or love losing money.
Undeterred by the massive losses incurred by his strategy of using public funds to invest in, Bukele announced last night that he spent another $1.5 million to buy 80 BTC at $19,000 per coin.
"El Salvador bought today 80 BTC at $19,000 each," the Central American politician tweeted, "Bitcoin is the future, thanks for selling cheap," he said.
Prior to this latest announcement, Bukele had invested about $104 million to buy 2,301 BTC at an average price of $45,171, according to his own tweets. Yesterday, when Bitcoin fell to $19,000, El Salvador’s Bitcoin stash was worth $43,719,000, implying losses for the country of about $60.2 million.
Thank you for selling cheap 😉 pic.twitter.com/ZHwr0Ln1Ze
— Nayib Bukele (@nayibbukele) July 1, 2022
With this latest purchase, Bukele would be bringing the average price invested per Bitcoin down from $45,171 to $44,219. This means Bitcoin would have to skyrocket to $44,219 (more than 100%) for Bukele to recoup the investment made on behalf of his country—without yet even taking any profit.
The strategy of accumulating Bitcoin after massive drops has also been replicated by other optimistic long-term Bitcoin investors. Michael Saylor, CEO of MicroStrategy, recently announced a new $10 million Bitcoin buy, bringing his company's treasury to 129,699 BTC at an average price of $30,664. This represents approximately $1.3 billion in losses, but like Bukele, Saylor doesn't seem too concerned about Bitcoin's short-term fluctuations.
Besides doubling down on Bitcoin despite heavy losses, Bukele’s latest buy was notable for another reason. The president, for the first time, shared new details regarding the process by which he purchases his country’s BTC.
Bukele showed screenshots of several BTC buy orders being executed at exactly $19,000.
If those shared screenshots correspond to the account being used to buy El Salvador's Bitcoin, it means the president uses a traditional centralized exchange for his trades and not an over-the-counter (OTC) desk, which would be a more logical choice for high-profile trades.
It could also mean that Bukele does not make market price purchases but leaves open "limit" buying orders. In this case, the order was partially filled upon completion as the price of Bitcoin touched exactly $19,000.