6 ms·

El Salvador's Bitcoin Buys Tracker

54 points by spaceman_2020 4y ago

mdrzn 4y ago
Very interesting data
danuker 4y ago
Ouch. 50% drop. They found the worst time to buy Bitcoin: all-time high.
- seaman1921 4y ago
  heh.. it seems the small rise after their first few purchases really made them confident - not to mention, everyone around the world talking about them might be a factor why they 'stayed in character' and kept buying
- wiredearp 4y ago
  The purchase probably helped drive the price to an all-time high. If the president had his personal wallet stuffed at all-time lows, you could argue that the timing was perfect for him at least.
mettamage 4y ago
What could the implications be for El Salvador in terms of policy and politics?
mgraczyk 4y ago
Looking at the size of this loss compared to government spending, it actually doesn't seem like that big of a deal. Definitely stupid and embarrassing, but doesn't seem likely to have a big fiscal impact.
- Lionga 4y ago
  Well its still 50 Million gone that could have been spend on bribing people and buying votes. So quite sure NAYIB BUKELE is not happy about it.
- poulpy123 4y ago
  I don't think you understand the difference between spending and loss
  - StanislavPetrov 4y ago
    What government does?
  - thematrixturtle 4y ago
    The Onion's meditations on the difference, aka "Should The Government Stop Dumping Money Into A Giant Hole?" https://youtu.be/JnX-D4kkPOQ https://youtu.be/JnX-D4kkPOQ
- rvense 4y ago
  This is a strange comparison. A government is not a household. Government spending, when domestic, doesn't mean that money goes away. It means that the money flows into other parts of the economy. Say, the government gives money to a doctor or civil servant who then spends it, i.e. they give it to someone else in the country, who can then spend it. Often it will relatively quickly flow back through the government again via taxes. Government spending is economic activity, and in many (most?) countries the state is one of the biggest employers and investors in things like infrastructure. In this case, it appears that instead of, say, giving money to a construction company who would than give money to workers and suppliers of materials (who could then spend that money in other parts of the Salvadorian economy) and getting a nice road for the people of El Salvador to boot, the government has instead given money to foreign investors in exchange for Bitcoin, and now those investors, because the magic line has gone down, are saying that the Salvadorian government can't have all the money back for the number of Bitcoin they have. I.e., they've lost out. Of course, there's no way to know which way the line's going to go next, that's part of the excitement of gambling on Dunning-Krugerrands, but it seems rather obvious that there's a very fundamental difference between a government being an economic actor in its country, and a government being an unproductive speculator sending (tax) money abroad.
easytiger 4y ago
What's he using Bitcoin to hedge against? Any trend bucking rumours that a South American leader might not be totally incompetent?
- hihihihi1234 4y ago
  El Salvador isn't in South America.
- ufo 4y ago
  The only logic I have heard is that El Salvador receives a large amount of remittances from the USA, from which banks and Western Union take a big cut. But Nayib Bukele is an autocratic president, which is making El Salvador less democratic by the day. In this case I think it's fair to blame the Bitcoin stuff to incompetence and/or corruption.
- Nursie 4y ago
  He’s not. He fell for the 1% fallacy, he spoke at a cryptocurrency conference a while back and said “BTC is worth X, imagine if we can get just 1% of that in inward investment!”
  - aaaaaaaaata 4y ago
    That...might have been his own conference.
    - Nursie 4y ago
      Hehe. Nah, I'm pretty sure it was part of a speech he gave in Miami at the same conference he announced El Salvador was going to make it legal currency. Could be wrong of course, memory is a tricky thing.
cranium 4y ago
It's not that much money for all the attention it gathered. Still, a 50% drop in 6 months will make anyone nervous.
- Saint_Genet 4y ago
  Well, given that El Salvador's GDP was $24.64 billion in 2020
- drexlspivey 4y ago
  > Still, a 50% drop in 6 months will make anyone nervous. Let me introduce you to tech stocks
irusensei 4y ago
I'm pretty sure I've read somewhere about a significant rise in tourism after they've announced bitcoin as legal tender and there are also the possibilities to attract revenue from miners using geothermal energy - which understand to be clean. So I guess they this Bitcoin thing could still be positive.
- Nursie 4y ago
  If tourism has gone up, does it not seem more likely correlated with the end of the pandemic? Investing in clean power sources and then using that power for mining seems a poor economic idea in a country with no fossil fuel reserves and which still relies on imports for its existing power needs.
  - irusensei 4y ago
    > If tourism has gone up, does it not seem more likely correlated with the end of the pandemic? I find unlikely that people with cabin fever are itching to visit a country with such a violent reputation as El Salvador. We might find more clues if we compare revenue from before the pandemic and bitcoin adoption. > Investing in clean power sources and then using that power for mining seems a poor economic idea in a country with no fossil fuel reserves and which still relies on imports for its existing power needs. I think its quite the opposite. They have lots of untapped power from volcano but no actual demand for that energy that justifies investment. Its just there. With bitcoin mining comes incentives from deploying infrastructure and strengthening their grid. Its not coal or gas so everyone should be happy with the results right?
    - Nursie 4y ago
      But they do have demand - their country is paying for imported fossil fuel. That is an energy demand and a cost they could develop away from. > With bitcoin mining comes incentives from deploying infrastructure and strengthening their grid Not really, just stick miners next to the generators, job done.
- MafellUser 4y ago
Hendrikto 4y ago
I know I will get downvoted for this, but 1. El Salvator did not loose money. Those are unrealized “losses”, 2. market cycles are normal and expected, if you thought “crypto will only go up from here”, you are delusional, 3. Bukele just needs to be patient, the fundamentals did not change. They still own 2301 BTC, and there still won’t ever be more than 21 Million. Adoption, hashrate, use cases, etc. all improved, and continue to do so. There will be another market cycle.
- headsoup 4y ago
  Unless there isn't of course. If the bad actors are taken out Bitcoin may never reach the value required to recover the losses. That risk is real, and I'm not sure El Salvador can just hodl forever
- enlyth 4y ago
  >there still won't ever be more than 21 Million Artificial scarcity does not imply value, I can create a token from thin air, make the supply only 3 tokens, and start saying it will gain value because there will only ever be three tokens. Also it's arbitrarily divisible to a lot of decimal points so that argument makes even less sense.
  - kebman 4y ago
    Your argument defeats itself because there obviously is a demand for Bitcoin that is large enough to prompt entire countries to adopt it as legal tender. As such it obviously has value. What traders disagree about is how high that value should be compared to other things. Notice for instance how fewer and fewer people are interested in selling Bitcoin the lower it goes. But I bet you'd love to get people to believe it's worthless so you can get it at a discount. Again, this proves that Bitcoin indeed has value. As for artificial scarcity; well, artificial or not, at least Bitcoin has scarcity. Obviously artificial trinkets in the form of worthless metal coins, paper notes, or numbers in a bank's database, does not have any meaningful scarcity compared to Bitcoin. Btw, whatever scarcity there is for fiat is also just as artificial, except its rulers and influencers can make as much of it as they like depending on their mood that day. Not so with Bitcoin. Artificial or not, its supply is hard capped at 21 million coins.
garydevenay 4y ago
The important thing to note about El Salvador's Bitcoin buying strategy is that it is not a "Buy and Hodl" strategy. Bitcoin in El Salvador is used as a currency, and just in the same way the Salvadorian government needs to procure dollars for their citizens to use in the country, they do the same for Bitcoin. The Bitcoin that El Salvador is buying is used as liquidity and is interchanged to and from dollars with it citizens on a daily basis. They are constantly making BTC/USD trades with their citizens, so it's not quite as straight-forward as "Bought at price X, today's price is Y, therefore loss is X-Y".
- Nursie 4y ago
  Except by all reports it’s not actually being used.
  - garydevenay 4y ago
    That's not true, it might not be close to being used as much as the dollar, but you are being intellectually dishonest.
    - secretsatan 4y ago
      5% is indeed not as much as the dollar https://seekingalpha.com/news/3829164-bitcoin-usage-in-el-salvador-underwhelming-while-us-dollars-dominate-nber-survey https://seekingalpha.com/news/3829164-bitcoin-usage-in-el-sa... I think to imply that it's just "might not be close" to the use of the dollar is more dishonest than saying it's not being used
      - garydevenay 4y ago
        Given that my statement is factually true and the other is factually false, I'd suggest you are imposing your own bias on that.
- stefan_ 4y ago
  The only currency in El Salvador is the US dollar.
naraga 4y ago
Bukele is dictator and the way he is doing this (literally buying from his phone and bragging about it like a degen trader) is shameful. Yet it is a bet that very likely will turn out positively for the country (if he doesnt steal the money). Bitcoin is already well recognized global asset that gives person or country clear monetary rules, ease of storage and transfer and access to all future advancements of the ecosystem. I dont see any fundamental difference between putting gold into country reserves vs Bitcoin. Yes, gold has history but fundamentally it is inferior to digital bearer asset. Bitcoin is writing history right now.
- sofixa 4y ago
  > I dont see any fundamental difference between putting gold into country reserves vs Bitcoin Stability? The fact that the IMF, US, EU and whoever will accept gold as collateral but wouldn't come anywhere close to a volatile imaginary "asset" like Bitcoin?
  - aaaaaaaaata 4y ago
    Not as true for the US as perhaps you've been led to believe.
  - naraga 4y ago
    Volatility is short term change in offer and demand. The fact the asset is held as reserve asset by many makes it less volatile over time. Monetary properties of gold and Bitcoin are very similar therefor makes it sound reserve asset. Gold non-imaginery properties (aka. physical substance) is irrelevant from monetary point of view.
olalonde 4y ago
Strange how HN seems interested in Bitcoin's price all of a sudden...
- hoffs 4y ago
  Always has been
- arez 4y ago
  it's just so refreshing to see people come to realization that their shiny tokens are worth nothing, it gives you hope that in the end, all the scams, lies and tricks are finally revealed
habibur 4y ago
tl;dr : they hold 2300 coins. Purchase on an average price of $56,000 / coin.

54 points by spaceman_2020 4y ago

mdrzn 4y ago

Very interesting data

danuker 4y ago

Ouch. 50% drop. They found the worst time to buy Bitcoin: all-time high.

seaman1921 4y ago
heh.. it seems the small rise after their first few purchases really made them confident - not to mention, everyone around the world talking about them might be a factor why they 'stayed in character' and kept buying
wiredearp 4y ago
The purchase probably helped drive the price to an all-time high. If the president had his personal wallet stuffed at all-time lows, you could argue that the timing was perfect for him at least.

mettamage 4y ago

What could the implications be for El Salvador in terms of policy and politics?

mgraczyk 4y ago

Looking at the size of this loss compared to government spending, it actually doesn't seem like that big of a deal. Definitely stupid and embarrassing, but doesn't seem likely to have a big fiscal impact.

Lionga 4y ago
Well its still 50 Million gone that could have been spend on bribing people and buying votes. So quite sure NAYIB BUKELE is not happy about it.
poulpy123 4y ago
I don't think you understand the difference between spending and loss
- StanislavPetrov 4y ago
  What government does?
- thematrixturtle 4y ago
  The Onion's meditations on the difference, aka "Should The Government Stop Dumping Money Into A Giant Hole?" https://youtu.be/JnX-D4kkPOQ https://youtu.be/JnX-D4kkPOQ
rvense 4y ago
This is a strange comparison. A government is not a household. Government spending, when domestic, doesn't mean that money goes away. It means that the money flows into other parts of the economy. Say, the government gives money to a doctor or civil servant who then spends it, i.e. they give it to someone else in the country, who can then spend it. Often it will relatively quickly flow back through the government again via taxes. Government spending is economic activity, and in many (most?) countries the state is one of the biggest employers and investors in things like infrastructure. In this case, it appears that instead of, say, giving money to a construction company who would than give money to workers and suppliers of materials (who could then spend that money in other parts of the Salvadorian economy) and getting a nice road for the people of El Salvador to boot, the government has instead given money to foreign investors in exchange for Bitcoin, and now those investors, because the magic line has gone down, are saying that the Salvadorian government can't have all the money back for the number of Bitcoin they have. I.e., they've lost out. Of course, there's no way to know which way the line's going to go next, that's part of the excitement of gambling on Dunning-Krugerrands, but it seems rather obvious that there's a very fundamental difference between a government being an economic actor in its country, and a government being an unproductive speculator sending (tax) money abroad.

easytiger 4y ago

What's he using Bitcoin to hedge against? Any trend bucking rumours that a South American leader might not be totally incompetent?

hihihihi1234 4y ago
El Salvador isn't in South America.
ufo 4y ago
The only logic I have heard is that El Salvador receives a large amount of remittances from the USA, from which banks and Western Union take a big cut. But Nayib Bukele is an autocratic president, which is making El Salvador less democratic by the day. In this case I think it's fair to blame the Bitcoin stuff to incompetence and/or corruption.
Nursie 4y ago
He’s not. He fell for the 1% fallacy, he spoke at a cryptocurrency conference a while back and said “BTC is worth X, imagine if we can get just 1% of that in inward investment!”
- aaaaaaaaata 4y ago
  That...might have been his own conference.
  - Nursie 4y ago
    Hehe. Nah, I'm pretty sure it was part of a speech he gave in Miami at the same conference he announced El Salvador was going to make it legal currency. Could be wrong of course, memory is a tricky thing.

cranium 4y ago

It's not that much money for all the attention it gathered. Still, a 50% drop in 6 months will make anyone nervous.

Saint_Genet 4y ago
Well, given that El Salvador's GDP was $24.64 billion in 2020
drexlspivey 4y ago
> Still, a 50% drop in 6 months will make anyone nervous. Let me introduce you to tech stocks

irusensei 4y ago

I'm pretty sure I've read somewhere about a significant rise in tourism after they've announced bitcoin as legal tender and there are also the possibilities to attract revenue from miners using geothermal energy - which understand to be clean. So I guess they this Bitcoin thing could still be positive.

Nursie 4y ago
If tourism has gone up, does it not seem more likely correlated with the end of the pandemic? Investing in clean power sources and then using that power for mining seems a poor economic idea in a country with no fossil fuel reserves and which still relies on imports for its existing power needs.
- irusensei 4y ago
  > If tourism has gone up, does it not seem more likely correlated with the end of the pandemic? I find unlikely that people with cabin fever are itching to visit a country with such a violent reputation as El Salvador. We might find more clues if we compare revenue from before the pandemic and bitcoin adoption. > Investing in clean power sources and then using that power for mining seems a poor economic idea in a country with no fossil fuel reserves and which still relies on imports for its existing power needs. I think its quite the opposite. They have lots of untapped power from volcano but no actual demand for that energy that justifies investment. Its just there. With bitcoin mining comes incentives from deploying infrastructure and strengthening their grid. Its not coal or gas so everyone should be happy with the results right?
  - Nursie 4y ago
    But they do have demand - their country is paying for imported fossil fuel. That is an energy demand and a cost they could develop away from. > With bitcoin mining comes incentives from deploying infrastructure and strengthening their grid Not really, just stick miners next to the generators, job done.
MafellUser 4y ago

Hendrikto 4y ago

I know I will get downvoted for this, but 1. El Salvator did not loose money. Those are unrealized “losses”, 2. market cycles are normal and expected, if you thought “crypto will only go up from here”, you are delusional, 3. Bukele just needs to be patient, the fundamentals did not change. They still own 2301 BTC, and there still won’t ever be more than 21 Million. Adoption, hashrate, use cases, etc. all improved, and continue to do so. There will be another market cycle.

headsoup 4y ago
Unless there isn't of course. If the bad actors are taken out Bitcoin may never reach the value required to recover the losses. That risk is real, and I'm not sure El Salvador can just hodl forever
enlyth 4y ago
>there still won't ever be more than 21 Million Artificial scarcity does not imply value, I can create a token from thin air, make the supply only 3 tokens, and start saying it will gain value because there will only ever be three tokens. Also it's arbitrarily divisible to a lot of decimal points so that argument makes even less sense.
- kebman 4y ago
  Your argument defeats itself because there obviously is a demand for Bitcoin that is large enough to prompt entire countries to adopt it as legal tender. As such it obviously has value. What traders disagree about is how high that value should be compared to other things. Notice for instance how fewer and fewer people are interested in selling Bitcoin the lower it goes. But I bet you'd love to get people to believe it's worthless so you can get it at a discount. Again, this proves that Bitcoin indeed has value. As for artificial scarcity; well, artificial or not, at least Bitcoin has scarcity. Obviously artificial trinkets in the form of worthless metal coins, paper notes, or numbers in a bank's database, does not have any meaningful scarcity compared to Bitcoin. Btw, whatever scarcity there is for fiat is also just as artificial, except its rulers and influencers can make as much of it as they like depending on their mood that day. Not so with Bitcoin. Artificial or not, its supply is hard capped at 21 million coins.

garydevenay 4y ago

The important thing to note about El Salvador's Bitcoin buying strategy is that it is not a "Buy and Hodl" strategy. Bitcoin in El Salvador is used as a currency, and just in the same way the Salvadorian government needs to procure dollars for their citizens to use in the country, they do the same for Bitcoin. The Bitcoin that El Salvador is buying is used as liquidity and is interchanged to and from dollars with it citizens on a daily basis. They are constantly making BTC/USD trades with their citizens, so it's not quite as straight-forward as "Bought at price X, today's price is Y, therefore loss is X-Y".

Nursie 4y ago
Except by all reports it’s not actually being used.
- garydevenay 4y ago
  That's not true, it might not be close to being used as much as the dollar, but you are being intellectually dishonest.
  - secretsatan 4y ago
    5% is indeed not as much as the dollar https://seekingalpha.com/news/3829164-bitcoin-usage-in-el-salvador-underwhelming-while-us-dollars-dominate-nber-survey https://seekingalpha.com/news/3829164-bitcoin-usage-in-el-sa... I think to imply that it's just "might not be close" to the use of the dollar is more dishonest than saying it's not being used
    - garydevenay 4y ago
      Given that my statement is factually true and the other is factually false, I'd suggest you are imposing your own bias on that.
stefan_ 4y ago
The only currency in El Salvador is the US dollar.

naraga 4y ago

Bukele is dictator and the way he is doing this (literally buying from his phone and bragging about it like a degen trader) is shameful. Yet it is a bet that very likely will turn out positively for the country (if he doesnt steal the money). Bitcoin is already well recognized global asset that gives person or country clear monetary rules, ease of storage and transfer and access to all future advancements of the ecosystem. I dont see any fundamental difference between putting gold into country reserves vs Bitcoin. Yes, gold has history but fundamentally it is inferior to digital bearer asset. Bitcoin is writing history right now.

sofixa 4y ago
> I dont see any fundamental difference between putting gold into country reserves vs Bitcoin Stability? The fact that the IMF, US, EU and whoever will accept gold as collateral but wouldn't come anywhere close to a volatile imaginary "asset" like Bitcoin?
- aaaaaaaaata 4y ago
  Not as true for the US as perhaps you've been led to believe.
- naraga 4y ago
  Volatility is short term change in offer and demand. The fact the asset is held as reserve asset by many makes it less volatile over time. Monetary properties of gold and Bitcoin are very similar therefor makes it sound reserve asset. Gold non-imaginery properties (aka. physical substance) is irrelevant from monetary point of view.

olalonde 4y ago

Strange how HN seems interested in Bitcoin's price all of a sudden...

hoffs 4y ago
Always has been
arez 4y ago
it's just so refreshing to see people come to realization that their shiny tokens are worth nothing, it gives you hope that in the end, all the scams, lies and tricks are finally revealed

habibur 4y ago

tl;dr : they hold 2300 coins. Purchase on an average price of $56,000 / coin.