El Salvador’s Bitcoin has made news again after announcing that it owns 5,750 Bitcoins (BTC), which, according to Bloomberg, is worth almost $353 million at the current market price. This disclosure follows establishing a tracking website by the National Bitcoin Office and mempool. Space, which aims to make the treasury’s Bitcoin holdings more transparent.
El Salvador’s Bitcoin Adoption Amid Criticism
In 2021, President Nayib Bukele made the Central American nation the first to accept Bitcoin as legal money. Nevertheless, the International Monetary Fund (IMF) and other global organizations have disapproved of this decision, citing worries about threats to financial stability.
Last year, Bukele began purchasing Bitcoin with public cash, unfazed by the criticism. Moving a large chunk of the country’s Bitcoin holdings to a cold wallet is a wise step to reduce security threats, making the country’s digital assets less susceptible to hacker efforts.
IMF Independence Looms?
Famous crypto investor and venture capitalist Tim Draper has discussed El Salvador’s innovative Bitcoin role on the Web3 Deep Dive channel. According to Draper’s optimistic prediction, if Bitcoin’s price were to hit $100,000, El Salvador could pay off its debts to the IMF and maybe even cut ties with the institution permanently. The venture capitalist said the country’s innovative cryptocurrency policies might make it one of the “most appealing destinations worldwide.”
People and nations wary about adopting cryptocurrency encounter opposition, which Draper also touched on. Aversion to change and a need for control, he said, were to blame for this resistance. The VC millionaire subtly attacked the US by saying that El Salvador’s Bitcoin stands out as a symbol of global growth due to its dedication to innovation and pioneering spirit.
The leading cryptocurrency is now eluding a sustained position above the critical $64,000 resistance level. This level is crucial because it determines whether Bitcoin can continue its upward momentum or attempt to retest its previous ATH of $73,700, which it reached on March 14. Given the increasing interest and recognition from institutional investors, the next few months will reveal how the Bitcoin price reacts to the approval of exchange-traded fund (ETF) markets in the US and Hong Kong.
Monitoring it’s Growing Bitcoin Treasury
As of May 13, 2024, El Salvador has a Bitcoin treasury of 5,748 BTC. This is worth approximately 360 million dollars based on the current Bitcoin price. Regular Bitcoin purchases of one every day have paid off. Nayib Bukele’s country has built huge reserves since embracing Bitcoin in September 2021. During the past week, El Salvador acquired 7 BTC for almost $438,000.
With its Bitcoin holdings, El Salvador has opted to increase openness via the Bitcoin Treasury website. This portal offers complete visibility into El Salvador’s BTC holdings, including:
- historical purchases,
- the average purchase price,
- unrealized gains.
El Salvador has almost 57 million USD in unrealized Bitcoin gains. This value could boost the country’s Bitcoin investment.
A Bet on Bitcoin’s Future
El Salvador’s adoption of Bitcoin is contested in cryptography. Famous investors like Tim Draper regard the country’s Bitcoin holdings as a potential lifeline despite the cryptocurrency’s volatility and risks.
If Bitcoin reached $100,000, El Salvador could pay off its IMF loans and become financially independent. El Salvador’s Bitcoin Treasury website aims to utilize Bitcoin’s potential for financial inclusion and innovation. The country proved it was right to legalize Bitcoin.
El Salvador’s Bitcoin Experiment: A Faithful Journey Despite Volatility
El Salvador was the first nation to recognize Bitcoin as lawful in September 2021. This change encouraged financial innovation, simplified remittance payments, and expanded access to financial services. Many were critical of President Nayib Bukele’s choice, especially following the steep decline in Bitcoin’s value from its November 2021 peak of $69,000. Despite the ups and downs, El Salvador has stuck to its Bitcoin plan, purchasing the cryptocurrency at an average price of $43,097 per BTC since 2021. El Salvador has made more than $57.4 million in unrealized profit on its Bitcoin assets, according to the Nayib Bukele Portfolio Tracker website, since Bitcoin is presently trading above $62,000.
Bukele, re-elected in February, recently criticized the official narratives presented by the media concerning the government’s economic policies in an opinion piece. He took issue with the media’s coverage of El Salvador’s Bitcoin holdings, drawing attention to the gap between coverage at low and high Bitcoin market prices. According to Bukele, El Salvador stands to gain more than 40% from the sale of its Bitcoin assets, given the recent meteoric rise in the cryptocurrency’s market value.
Reiterating the government’s position on Bitcoin, he stressed that “1 BTC = 1 BTC” despite market volatility. According to Bukele, critics in the media had previously brought attention to possible losses. Since Bitcoin values were lower, they have been silent. Among nations that have adopted a “Bitcoin standard,” El Salvador is unique, despite the attention it has received for its adoption of Bitcoin. Official announcements have not been made, although speculations suggest that additional countries may follow suit. Speculation, however, persists that El Salvador could repay its loans to the International Monetary Fund once. Bitcoin reaches $100,000, thus achieving financial independence.
