El Salvador’s bold bet on bitcoin is paying off handsomely, as the country’s crypto treasury has surged to over $206 million, representing a 69% gain on the initial capital invested since September 2021.
The Central American nation, which made history by adopting bitcoin as legal tender, is now sitting on $84 million in unrealized profits amid the recent bitcoin rally that has seen prices hit new all-time highs above $72,000.
TLDR
- El Salvador’s bitcoin holdings are now worth over $206 million, representing a 69% gain on the initial capital invested since September 2021.
- The country’s bitcoin treasury is currently sitting on $84 million in unrealized profits, thanks to the recent bitcoin rally that has seen prices hit new all-time highs.
- In addition to the profits from its bitcoin holdings, El Salvador is earning revenue from various sources, including a citizenship passport program, bitcoin mining, and government services.
- Billionaire venture capitalist Tim Draper predicts that El Salvador’s investment in bitcoin could transform the nation from one of the poorest and most crime-ridden to one of the wealthiest and most innovative within 30 to 40 years.
- Draper believes that El Salvador’s embrace of bitcoin could help the country liberate itself from financial dependence on institutions like the IMF if the cryptocurrency reaches $100,000.
El Salvador’s bitcoin buying strategy, spearheaded by President Nayib Bukele, has been the subject of much scrutiny and debate.
When the country first began purchasing bitcoin in September 2021, the cryptocurrency was trading at around $51,769.
However, as bitcoin prices plummeted during the bear market that followed, El Salvador’s portfolio fell deep into the red, raising concerns about the wisdom of the nation’s investment.
Despite the initial setbacks, Bukele remained steadfast in his commitment to bitcoin, and his conviction has been vindicated by the recent market resurgence. As of March 12, 2024, El Salvador’s bitcoin holdings, which total 2,861 BTC, are worth approximately $207.3 million, marking a significant turnaround from the portfolio’s previous losses.
In addition to the profits from its bitcoin holdings, El Salvador is also generating revenue from various other sources related to its embrace of cryptocurrency. President Bukele recently commented on social media that the country is earning bitcoin revenue from a citizenship passport program, which converts bitcoin to U.S. dollars for local businesses, as well as from bitcoin mining and government services.
+ #BTC revenue from our passport program
+ Revenue from converting #BTC to USD for local businesses
+ #BTC from mining
+ #BTC revenue from government services https://t.co/O1sjKoJRiq— Nayib Bukele (@nayibbukele) March 11, 2024
The potential impact of El Salvador’s bitcoin investment on the nation’s future has not gone unnoticed by prominent figures in the crypto industry.
Billionaire venture capitalist Tim Draper has predicted that the country’s adoption of bitcoin could catapult it from one of the poorest and most crime-ridden nations to one of the wealthiest and most innovative within just a few decades.
During a recent appearance on the ‘Web3 Deep Dive’ podcast, Draper emphasized the transformative potential of El Salvador’s bitcoin strategy, stating,
“They’ll probably be the most attractive country in the world to go live, and they will have, within maybe 30 or 40 years, gone from the poorest, most crime-ridden country to maybe one of the richest, most innovative countries in the world, just in that period of time and just because they embraced bitcoin.”
Draper also suggested that El Salvador’s bitcoin investment could help the nation achieve financial independence from institutions like the International Monetary Fund (IMF). He noted that if bitcoin reaches $100,000, El Salvador may be able to pay off its loans to the IMF and never have to rely on the organization again.
As El Salvador continues to reap the benefits of its pioneering approach to bitcoin adoption, the country serves as a powerful example of the potential for cryptocurrency to drive economic growth and financial inclusion.
While challenges and risks remain, the nation’s success in navigating the volatile crypto market and generating substantial profits from its bitcoin holdings is a testament to the vision and determination of its leadership.
