El Salvador is now reaping substantial profits on its Bitcoin investment following the crypto’s recent rise in value. After taking a bold step by embracing BTC as a legal tender, the Central American nation’s strategic Bitcoin investments have now translated into multi-million dollar gains.
El Salvador Bitcoin Bet Pays Off
Over the last few years, El Salvador, one of the smallest countries in Central America, has been steadily growing its Bitcoin portfolio. Between September 2021 and January 2022, El Salvador’s government purchased about $85.5 million in Bitcoin. The country’s investment value saw a large decline after the price of Bitcoin began falling in November 2021. At the time, El Salvador lost about $22 million from the unexpected decline.
Despite these losses, the El Salvador government remained undeterred and continued to purchase Bitcoin during the dip. In 2022, the Central American nation purchased hundreds of Bitcoins, resulting in El Salvador’s current total BTC holdings amounting to 2,798 BTC valued at $131.3 million.
The country’s BTC investment acquired at an average purchase cost of $42,440, positions itself for potential gains as Bitcoin is anticipated to rise to new heights during the 2024 bull run. Despite facing criticism for its support of Bitcoin internationally, the country is now experiencing a surge in profits, totaling $12.6 million.
At the time of writing, the price of Bitcoin is $45,883 according to CoinMarketCap. Over the past year, the cryptocurrency has experienced a remarkable price increase of 166.78%. With the increased anticipation surrounding the potential approval of Spot Bitcoin ETFs, the cryptocurrency is poised to grow even more.
BTC price falls to $45,500 | Source: BTCUSD On Tradingview.com
El Salvador’s Large BTC Bet To Boost Economic Stability
In September 2021, El Salvador adopted Bitcoin as a legal tender, alongside its nationally recognized currency, the US dollar. Under the leadership of President Nayib Bukele, the Central American country became one of the few nations to completely integrate Bitcoin as a national currency.
While the United States’ recent enforcement actions on the crypto industry have slowed down the advancement of crypto and blockchain technology in the country, El Salvador embraces Bitcoin to offer a level of economic stability for the country.
Despite facing significant criticism and skepticism from the US government and the International Monetary Fund (IMF), El Salvador remains steadfast in its commitment to shaping its financial system around Bitcoin.
The current benefits of El Salvador’s large BTC bet are not limited to large-scale profits and economic stability alone. The nation is presently experiencing increased financial inclusion as a large percentage of its citizens are engaging in digital transactions for their daily activities.
This shift towards a more technological and financially sustainable economy aligns with the country’s broader vision for economic growth and development.
Featured image from Bitcoin Impacts, chart from Tradingview.com