Robert Steinadler, a month ago

El Salvador: Bukele’s Bitcoin trades are far less than transparent

Bitcoin is transparent. Its blockchain and the supply of BTC can be audited at any time and by any person. In fact, the ongoing validation of each new block can be considered already an audit of present and past transactions. This transparency is a feature that is unmatched and it has been working continuously for the last 13 years. Trading with Bitcoin on the other hand is not necessarily transparent and has brought up some issues in El Salvador more recently.

How much Bitcoin was bought by El Salvador and why is transparency an issue when it comes down to Bukele’s trades? 

Bukele is not a successful trader

President Bukele bought Bitcoin repeatedly since last year and most of these trades weren’t successful. According to the website Nayibtracker, the president bought Bitcoin for over $107 million on several occasions starting in September 2021.

These purchases were part of his bigger plans of making Bitcoin legal tender alongside the US-Dollar in El Salvador. Every citizen was given $30 worth of BTC in the government’s own Chivo wallet and Bitcoin ATMs were set up across the country. Bukele’s decision was criticized by the IMF and put heavy pressure on El Salvador which is in desperate need of new loans from the IMF.

His own trading strategy has not played out yet and El Salvador is over $58 million and is down over -54% on its BTC position. Of course, one could argue that it is only a loss if the country sells.

Development bank does not provide records

According to the Anti-Corruption Legal Advisory Center, the country’s development bank BANDESAL refused to provide records about those purchases. The bank is officially in charge when it comes down to these investments. 

It is well known that president Bukele was purchasing Bitcoin on his smartphone and many critics worried that he might lose access to it. Those concerns were not sophisticated since the president was trading on his smartphone but he is not keeping private keys on it. The official records on the other hand are a different topic.

So far, the citizens, as well as the rest of the world, were informed by Bukele himself via Twitter each time he bought Bitcoin on the behalf of his country. One could argue that this is highly transparent, but without providing access to official records we cannot be too sure how much BTC Bukele bought or maybe even sold.

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