Bukele Bets Big on Bitcoin

  • Bitcoins
  • 11.05.2022 08:15 am

 In the midst of a selloff, El Salvador’s President Nayib Bukele added an additional 500 Bitcoin to the country’s balance sheet. The purchase is the country’s largest since it first added Bitcoin to its assets last September. The average price of purchase was roughly $30,744, and the country now holds over 2,300 Bitcoin, currently worth approximately $70 million.

“This really shouldn’t be a surprise. The president has bought the dip continuously since adopting Bitcoin as a national currency. He’s seeing what many are seeing: external macroeconomics and geopolitical events at play, dragging the price of Bitcoin down. However, he’s banking his entire political career on this bet,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

In a tweet, Bukele said, “El Salvador just bought the dip! 500 coins at an average USD price of ~$30,744 #Bitcoin”

“He’s doubled down on his belief. Over and over. The good news for him is that the fundamental technology is worthwhile, and the dip we’ve been seeing does seem to be stemming from external effects. This dip isn’t caused by industry factors as much as what’s happening across the economy as a whole,” noted Gardner.

Bukele is facing a number of critics, perhaps most notably, the IMF, which noted in January that the country’s adoption of Bitcoin as legal tender “entails large risks for financial and market integrity, financial stability, and consumer protection.”

“El Salvador is a country with a great need for banking services. Most estimates peg the unbanked segment of the citizenry at roughly 70%, so it makes sense that digital assets would offer significant upside, particularly as it relates to introducing the country to banking services,” noted Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“However, the country has also been looking for a loan. Originally, it hoped for a $1.3 billion influx of cash from the IMF. Then, it looked to raise the funds through a Bitcoin bond that didn’t quite pan out as hoped. Whatever comes next, I think history will view Bukele through the success or failure of his Bitcoin gambit,” opined Gardner.

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