In a series of tweets, Bukele affirmed that his government had decided to “buy Bitcoin dip” and “was already profiting from Bitcoin” which they bought a few hours ago.
When challenged to explain how this would be possible if the government were keeping rather than selling its Bitcoin, the self-proclaimed “Emperor” tried to explain.
We have a trust fund accounted for in USD, but the trust is funded by both USD and BTC.
When the BTC part revalues in comparison to the accounting currency (USD), we are able to withdraw some USD and leave the trust with the same total.
— Nayib Bukele 🇸🇻 (@nayibbukele) October 27, 2021
How can we make a profit if 1 #BTC = 1 #BTC ?
We have a trust fund accounted for in dollars, but the trust is funded by USD and BTC. When the BTC share is revalued against the book currency (USD), we can withdraw a few dollars and leave the fund with the same total.
Media critics were quick to point out that the government has offered nothing to clarify how these Bitcoin purchases are being made.
The country’s biggest newspaper, El Diario de Hoy, wrote that Bukele’s government “has not yet revealed how much it has spent on purchases of cryptocurrencies and has not made it clear whether it paid commission fees for each individual purchase.”
He also pointed out that the money used to buy the coins came from “public funds”.
Bitcoin purchase details
Bukele and his government have made several token purchases since September 7, the day Bitcoin became the country’s legal tender, along with the US dollar.
By its own calculations, the media outlet La Prensa Gráfica stated that, at the time of Bukele’s announcement, “the price of Bitcoin was US$58,999, so it can be estimated that around US$23.6 million was spent on this last purchase”.
As no public record of Bitcoin purchases was made, observers were left with nothing to base their calculations on other than Bukele’s tweets. But if they’re correct and the state hasn’t sold any of its coins for fiat money, the Salvadoran Treasury now holds 1,120 Bitcoin ($66 million).
Calculations by La Prensa Gráfica found that the first 700 cryptocurrencies likely cost the government about $34.4 million.
At 9:00 am EDT, Bitcoin is trading at $61,071 and up 4.14% in one day and over 11% in one week.