In a surprising move three years ago on September 7, 2021, El Salvador’s President, Nayib Bukele, announced that the country would be adopting Bitcoin as legal tender. This decision sent shockwaves through the world, as El Salvador became the first country to make such a bold move. Along with adopting Bitcoin, the country also began buying BTC to add to its reserves, gradually increasing its stash over the years. As El Salvador marks its third year into its BTC venture, it is worth examining how this decision has panned out and whether it was a wise investment in the long run.
El Salvador’s initial foray into Bitcoin began on September 6, 2021, a day before the official announcement of adopting BTC as legal tender. The country made its first Bitcoin purchase, acquiring 400 BTC at an average price of $46,811, totaling $18.724 million at the time. Since then, El Salvador’s Bitcoin treasury has expanded significantly, with several substantial purchases following the initial buy. Within a year of the first purchase, the country’s BTC stash surpassed 2,300 BTC, with additional Bitcoin acquisitions in the pipeline.
As of the latest data available, El Salvador currently holds a total of 5,867 BTC. The average cost of this Bitcoin stash is reported to be $43,884, with the current BTC price exceeding $55,000. This implies that the country has realized substantial profits on its holdings. According to the Nayib Tracker website, El Salvador has accrued a profit of $34.55 million from its Bitcoin purchases, representing a remarkable 25.88% gain over the past three years. Additionally, El Salvador’s BTC holdings rank it as the third-largest government holder of Bitcoin globally, trailing only behind the US and UK governments.
Despite the notable profits garnered from its Bitcoin holdings, President Nayib Bukele has reiterated that El Salvador has no intentions of selling its BTC. The president has emphasized that the country views its BTC holdings in a non-dollar-centric manner, valuing 1 BTC as equal to 1 BTC irrespective of its dollar value. In terms of Bitcoin adoption as legal tender, President Bukele has clarified that residents have not been compelled to adopt the cryptocurrency. El Salvador continues to operate with two legal tenders – the US dollar and Bitcoin, affording residents the flexibility to choose the currency of their preference.
El Salvador remains steadfast in its commitment to its Bitcoin initiative, recently launching its own BTC monitoring website. This platform enables users to track various BTC metrics and monitor the country’s BTC holdings in real-time. The country’s unwavering dedication to its Bitcoin mission is evident in its ongoing efforts to promote and integrate the cryptocurrency into its economic framework.
As El Salvador navigates its unique path as a pioneer in Bitcoin adoption, the world watches closely to assess the outcomes of this groundbreaking decision. With impressive profits realized from its Bitcoin holdings and a steadfast commitment to its BTC mission, El Salvador stands as a compelling case study in the evolving landscape of digital currencies and financial innovation. Only time will tell the full extent of the impact of El Salvador’s Bitcoin journey and whether it will serve as a model for other nations to follow in embracing the future of finance.
