El Salvador government loses $36 million in bitcoin crash as national debt grows

El Salvador government loses $36 million in bitcoin crash as national debt grows

El Salvador – which became the first country to make bitcoin legal tender in September — has lost $36 million in cryptocurrency as bitcoin plummeted over 50% from its all-time high on Thursday. President Nayib Bukele bet big that bullish bitcoin investments could rescue El Salvador's economy from its growing debt-to-GDP ratio. Now, the crypto market's crash is fulfilling critics' warnings against investing treasury funds into volatile digital currencies. Bukele's administration has spent a total of $103 million on 2,301 bitcoins since September of last year, according to data. As of Thursday afternoon, the coins were valued at around $67 million. El Salvador currently owes an estimated in national debt. The International Monetary Fund (IMF) issued multiple warnings to the administration about legalizing bitcoin as an acceptable form of payment for any purchase or debt. In February, Fitch Ratings El Salvador's default rating from a "B-" to a "CCC," citing financing uncertainty spurred by the law. "Households and businesses who hold Bitcoin balances and save in Bitcoin could lose wealth through large swings in value," the IMF El Salvador team, led by Alina Carare, in February. "The adoption of Bitcoin as legal tender is fully funded by public money, through