Nayib Bukele, CEO of El Salvador, and one of the more public champions has been accumulating Bitcoin for his country.
He has been buying occasionally and in large chunks before. At the end of November 2022 he announced daily buys of 1 BTC:
There has been no further update on that strategy since then. Because there are no official wallets to track, it leaves us with his announcements on Twitter and market data to gauge the position.
Until Today
Bukele announced on December 4th 2023, that the overall position reached break even.
If we assume a monthly average price for 1 BTC per day from November 17, 2022, until December 3, 2023, and a current market price per Bitcoin of $42’000, we get $3’6100 million.El Salvador's #Bitcoin investments are in the black!
— Nayib Bukele (@nayibbukele) December 4, 2023
After literally thousands of articles and hit pieces that ridiculed our supposed losses, all of which were calculated based on #Bitcoin’s market price at the time...
With the current #Bitcoin market price, if we were to sell… pic.twitter.com/gvl2GfQMfb
Per this calculation, El Salvador now holds 2’761 BTC at an average price of $40’693.
The cost basis is $112,4 million, current market value is $116 million, with a profit of $3,6 million.
The effect of dollar cost averaging into a position
If he decided to invest a lump sum into Bitcoin on September 6th, 2021, at a price of $46’750, his position would still be under water by 10%.
Because he averaged into the position at various points in time, the overall position is in the black by 3,2%.
A difference of 13% may seem trivial with respect to the volatility of crypto but it proves a point.
Dollar cost averaging (DCA) is an investment strategy that aims to apply value investing principles to regular investment. The term was first coined by Benjamin Graham in his book The Intelligent Investor. Graham writes that dollar cost averaging "means simply that the practitioner invests in common stocks the same number of dollars each month or each quarter. In this way he buys more shares when the market is low than when it is high, and he is likely to end up with a satisfactory overall price for all his holdings.
Source: Wikipedia
p.s. Benjamin Graham was one of the most important influences on Warren Buffet early in his investment career. Until Charlie Munger entered the picture and taught Buffett to not only focus on price, but also on the underlying quality of a company.
Data is based on Tweets by El Presidente himself and daily BTC prices from CoinGecko.
No verifiable blockchain data has been used
Relevant Links
The "Crypto Critics' Corner" has new episode about Bitcoin and El Salvador out.
El Salvador Revisited: Chivo, KYC/AML, and Nayib Bukele (Feat. Domingo Flores) - Episode 76 - 02.06.2022
Peter McCormack’s “What Bitcoin Did” podcast: Follow The Money #1 - Bitcoin in El Salvador - 17.05.2022
Bukele on the "What Bitcoin Did" podcast: Why El Salvador Made Bitcoin Legal Tender with President Nayib Bukele - 23.06.2021
The second Bukele interview on the "What Bitcoin Did": Bitcoin in El Salvador - Part 2 with Nayib Bukele - 25.05.2022
Crypto starts June in a slump and the latest on El Salvador’s bitcoin experiment: CNBC Crypto World – 01.06.2022
Vote for my witness: @blue-witness
Posted Using InLeo Alpha
Thank you for your witness vote!
Have a !BEER on me!
To Opt-Out of my witness beer program just comment STOP below
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
100% of the rewards from this comment goes to the curator for their manual curation efforts. Please encourage the curator @bhattg by upvoting this comment and support the community by voting the posts made by @indiaunited.
Thank you for your witness vote!
Have a !BEER on me!
To Opt-Out of my witness beer program just comment STOP below
View or trade
BEER.Hey @bluerobo, here is a little bit of
BEERfrom @isnochys for you. Enjoy it!Do you want to win SOME BEER together with your friends and draw the
BEERKING.Hello @bluerobo
This is my own !BEER
Have fun with it!:)
Thank you for your witness vote!
Have a !BEER on me!
To Opt-Out of my witness beer program just comment STOP below
View or trade
BEER.Hey @bluerobo, here is a little bit of
BEERfrom @isnochys for you. Enjoy it!Learn how to earn FREE BEER each day by staking your
BEER.View or trade
BEER.Hey @bluerobo, here is a little bit of
BEERfrom @isnochys for you. Enjoy it!Learn how to earn FREE BEER each day by staking your
BEER.