In the context: The crypto crash has affected many digital asset holders, from individuals who lost their savings to companies investing in cryptocurrencies. The collapse is also affecting El Salvador. The country that made bitcoin legal tender last year is estimated to have lost about $40 million due to the fall in the price of bitcoin.

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Bitcoin became the official currency along with the US dollar in El Salvador last year. The move proved controversial, with many citizens fearing BTC volatility would exacerbate the country’s economic woes, and the government’s wallet app proving far from reliable. El Salvador also faced opposition from The World Bank and IInternational Monetary Fund (IMF) about his decision.

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Things are getting worse in El Salvador due tocrypto crash his week this has caused the market capitalization of the cryptocurrency to be erased by nearly $1 trillion. bloomberg writes that bitcoin’s 40% drop since the end of March means that President Nayib Bukele’s losses from BTC have reached about $40 million, and this raises questions about whether the government will be able to pay off its next debt – an $800 million Eurobond repayment due be repaid in January of the following year. year. Several international credit agencies have already downgraded El Salvador’s credit rating to CCC, also known as junk.

El Pais notes that the IMF, which could help El Salvador pay off its next foreign debt, has urged Bukele to move away from bitcoin as legal tender, complicating the country’s relationship with the organization.

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Bukele apparently doesn’t care that accepting Bitcoin as legal tender was a costly mistake. On May 9, he bought another 500 coins for $15.5 million. At the time of writing, their value has dropped by about $500,000. He also reminded people that Bitcoin City going great, apparently.

h/t: PC gamer

Head credit: Usecoin