El Salvador's bold approach to Bitcoin investment is proving increasingly profitable. The country, which has been actively accumulating the cryptocurrency since 2021, is witnessing significant returns as Bitcoin's value skyrockets.
With a total of 6,153 bitcoins amassed by late 2021, El Salvador's holdings have reached unrealized gains exceeding $117 million, as per the Nayib Bukele Portfolio Tracker. Bitcoin's current valuation of over $80,000 has boosted the country's investment portfolio by 85%, highlighting the government's strategy of using Bitcoin as a financial reserve.
Since November 2022, El Salvador has been employing a consistent buying strategy: acquiring 1 BTC each day. This disciplined approach has so far added 727 bitcoins to the treasury, yielding a stunning 95.7% return. However, the most lucrative gains came from strategic purchases made during the 2022 bear market. Back then, the government secured 80 bitcoins for around $19,000 each. These coins have now appreciated by 332.8%, showcasing Bitcoin's potential as a crisis asset.
The country's Bitcoin portfolio returned to a positive balance in early 2024, overcoming a history of unrealized losses. With an average purchase price of $44,313 per bitcoin, El Salvador’s investment remains secure as long as Bitcoin stays above this level.
This turnaround is a victory for President Nayib Bukele’s often controversial Bitcoin strategy, which critics have deemed risky due to the asset's volatility. Despite his silence in recent months, supporters are celebrating this financial success. Figures such as Rodrigo Icaza from the Panamanian Chamber of Digital Commerce and Blockchain have praised Bukele’s vision. Icaza recently remarked on social media that Bukele's determination to establish a Bitcoin reserve should be recognized, especially as the benefits become clear.
El Salvador’s Bitcoin boom is unfolding alongside a global debate over cryptocurrency reserves. Even in the United States, discussions are heating up, with Senator Cynthia Lummis advocating for the inclusion of Bitcoin in national financial reserves. Lummis and other proponents emphasize Bitcoin’s performance, which has consistently outpaced inflation and other traditional assets.
Analysts point out that Bitcoin has delivered a compound annual growth rate of 64% over the past decade, presenting an attractive option for nations looking to shield their reserves from currency devaluation. As El Salvador's experience demonstrates, investing in Bitcoin may be a gamble, but it's one that could redefine how countries manage their financial future..
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