El Salvador is marking the third anniversary of its historic decision to adopt Bitcoin as legal tender, with the country now sitting on over $31 million in Bitcoin profits. Despite facing initial skepticism, President Nayib Bukele’s bold cryptocurrency move appears to be paying off.
A Bold Decision for Financial Innovation
On September 7, 2021, El Salvador made history by becoming the first country to adopt Bitcoin as an official currency alongside the U.S. dollar. This decision was aimed at promoting financial inclusion, streamlining remittance payments, and attracting technological innovation to the nation.
President Bukele’s move, seen as radical at the time, drew global attention. According to Alex Momot, founder and CEO of the crypto platform Peanut Trade, the country’s Bitcoin experiment is considered groundbreaking. “El Salvador’s venture into Bitcoin has proven to be a success in many ways. While it’s still too early to assess every aspect, the country’s willingness to take this risk has clearly brought some positive outcomes,” he noted.
Financial Gains and Strategic Investments
Since its adoption, El Salvador has steadily invested in Bitcoin, following a dollar-cost averaging strategy by purchasing 1 Bitcoin daily. As of now, the country holds 5,865 Bitcoin, valued at over $318 million, according to the country’s treasury.
El Salvador acquired its Bitcoin at an average price of $43,877 per coin. With Bitcoin trading at $54,300 as of September 7, 2024, the country’s Bitcoin wallet shows a profit of over $31 million, based on data from the Nayib Bukele Portfolio Tracker.
This financial gain has bolstered Bukele’s stance, with Momot emphasizing that the positive returns provide further credibility to the president’s decision. “The $31 million profit strengthens Bukele’s position, reinforcing the tangible benefits of his daring experiment in cryptocurrency,” Momot added.
Overcoming Criticism and Market Volatility
Initially, Bukele’s decision faced significant criticism, especially after Bitcoin’s value plunged following the collapse of the FTX exchange in late 2021. Bitcoin, which had reached an all-time high of $69,000, dropped as low as $16,000 during the subsequent bear market, putting El Salvador’s investments in the red. However, with the recent market recovery, the country’s Bitcoin holdings have returned to profitability.
This milestone serves as a reminder of El Salvador’s resilience in navigating market fluctuations while maintaining its commitment to digital currency adoption.
