El Salvador's president's bucklebit bet has cost the country's cash strapped government enough to pay the next interest payment to bondholders, indicating that the country's experiment with cryptocurrency poses a higher risk. Since the end of March, the price of bitcoin has plummeted by about 40%, exacerbating the loss of bitcoin held by El Salvador. It is estimated that the cumulative loss has reached about $40 million.
This is a little more than the interest paid by the country for the next repayment of its external debt. El Salvador will pay interest on a batch of foreign debt due in 2035 on June 15, about US $38.25 million.
According to a statement on twitter by Salvadoran President bookley, since becoming the world's first government to make bitcoin legal tender last September, his government has spent a total of about $105 million on bitcoin. Bitcoin has fallen 45% since its first purchase, reducing the value of 2301 bitcoins held by El Salvador to about $66 million.
This is another blow to Buckley, a devout believer in cryptocurrency, who has been trying to sell a bitcoin backed bond for more than five months. But investors have become dissatisfied with El Salvador's bonds. They are worried not only about the government's ability to maintain the liquidity of its debt, but also about its willingness to do so.