El Salvador’s investment in Bitcoin (BTC) is proving to be highly lucrative, with the country now boasting an impressive 70% profit on its dollar-cost average purchase price.
After a recent surge in the price of Bitcoin, El Salvador’s crypto treasury has soared to a profit of $85 million, as reported by the Nayib Tracker website. This significant growth aligns with Bitcoin’s record-breaking rally above $72,000 on March 11.
Bukele’s Bitcoin Investment Strategy
President Nayib Bukele initiated the Bitcoin purchasing strategy in September 2021 when El Salvador officially embraced Bitcoin as legal tender. During the initial purchase of 200 coins, Bitcoin was trading at $51,769.
Despite facing criticism when Bitcoin experienced a subsequent decline from its peak of $69,000 in November 2021, dropping to as low as $16,000 during the ensuing bear market, the investment portfolio rebounded when BTC prices surpassed the dollar-cost average of $42,600 in February, resulting in substantial profits.
Currently, the portfolio comprises 2,861 BTC, valued at $207.3 million.
President Bukele emphasized that the benefits of Bitcoin extend beyond investment gains. El Salvador has generated revenue through various channels, including the country’s passport program, converting BTC to USD for local businesses, Bitcoin mining activities, and government services.
In December, El Salvador enacted a migration law offering expedited citizenship to foreigners making Bitcoin donations to support government programs. Additionally, the country ventured into Bitcoin mining in October through a partnership between Volcano Energy and Luxor Technology, establishing its first Bitcoin mining pool.
El Salvador’s Bitcoin Profits and Financial Independence
Optimistic projections suggest that if Bitcoin reaches $100,000, El Salvador may be able to pay off its loans to the International Monetary Fund (IMF). This has led some, including venture capitalist Tim Draper, to believe that the nation will achieve financial independence.
Despite previous skepticism from the media, President Bukele remains steadfast in his plans for Bitcoin, vowing to continue after securing a second term in the upcoming election. The administration’s future plans include launching Bitcoin-backed bonds in the first quarter of 2024, establishing a tax-free crypto haven called Bitcoin City, and issuing passports to investors who contribute the equivalent of $1 million in cryptocurrency.
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender, despite facing criticism from various quarters, including the IMF.
Apart from El Salvador, other major investors in cryptocurrency have also seen substantial profits. MicroStrategy, one of the largest institutional holders of Bitcoin, has seen its unrealized profit soar to around $5 billion.