The latest news is that El Salvador will once more start buying Bitcoin, according to President Nayib Bukele. President Bukele hasn't clarified for how long they want to keep up this purchase program, though, but his latest tweet reads:
The Bitcoin Law in El Salvador went into force on September 7 of last year. The nation has purchased Bitcoins worth around $375 million, yet it has more than $60 million in unrealized paper losses.
The largest advocate of Bitcoin, President Nayib Bukele, thinks that the cryptocurrency will improve the nation's financial situation. Furthermore, he has defied all expectations for their Bitcoin wager despite repeated requests from the IMF and the World Bank to cancel it.
The decrease in the price of bitcoin over the past year has undoubtedly been fatal for El Salvador. Additionally, the FTX episode's development over the past week has significantly increased selling pressure on BTC. On the other hand, it appears that President Nayib Bukele has grown confident enough to place a long-term wager on new Bitcoin purchases.
China Axis and El Salvador
President Nayib Bukele has been working on building a comprehensive Bitcoin economy infrastructure in addition to accumulating Bitcoins. He also discussed plans for creating a Bitcoin City and issuing Bitcoin Volcano Bonds, both of which have not yet come to pass.
Although President Bukele has been banking on Bitcoin-denominated volcanic bonds to pay off their national debt, so far, things haven't gone in his favor. El Salvadorian economist Luis Membrao said:
“If Bukele dreamed that he could create a different and innovative political economy, against the advice of the IMF, that dream has failed. There are no easy alternatives, no short-cuts.”
Every major rating agency has cut El Salvador's credit line due to its grandiose Bitcoin intentions. According to rating agency Fitch, the nation could go into default on its debt in January. On the other hand, the country's economy is projected to suffer more from an impending recession, rising inflation, and the worsening budgetary position.
According to economist Membrao, El Salvador may request debt finance from China and so fall under its financial axis. El Salvador's foreign policy would be completely realigned, he declared.