Bitcoin in El Salvador: a three-year overview
Three years ago, President Naib Bukele's decision to legalize Bitcoin (BTC) in El Salvador made global headlines. September 7, 2021 “Bitcoin Law” goes into effect, making El Salvador the first country to adopt Bitcoin as an official currency.
Since then, the country has seen significant economic and social changes, highlighting the impact and potential of bold action.
The Rise and Fall of Bitcoin Value: The Impact on El Salvador
El Salvador's Bitcoin embrace has been mixed with challenges and successes. The country now holds more than $411 million in Bitcoin, over a portfolio of 5,772 BTC.
Read more: Who will have the most Bitcoins in 2024?
President Naib Bukele was recently sworn in for a second term, reinforcing his support for Bitcoin. The country continues to buy Bitcoin, earning up to 30 BTC per month. As of May, El Salvador has received more than $70 million in undisclosed profits from Bitcoin investments.
“Let's not lose perspective. We are not only changing the country, we are changing the paradigm. We have already done more than anyone can imagine. “Other people want us to have what we have now,” Booke announced at the time of his re-election.
Despite the volatility of the crypto market, the government of El Salvador has remained steadfast in its support for Bitcoin. The government has maintained its Bitcoin holdings and invested continuously. Moreover, El Salvador continues to integrate its assets in various economic sectors.
For example, Salvadorian citizens can use BTC to pay for goods and services, taxes, and through the official Chivo wallet. The government has implemented policies and incentives to attract crypto investments, including citizenship and mining service passports.
El Salvador has invested in Bitcoin mining using volcanic energy. The state-owned plant on the Tekapa volcano operates about 300 reactors in the country using geothermal resources. This investment comes as the Bitcoin mining difficulty reaches an all-time high, highlighting the country's innovative approach.
Recent developments have further strengthened El Salvador's Bitcoin journey. First, the approval of the first Bitcoin spot exchange-traded funds (ETF) in January 2024 raised the price of BTC from $41,670 to $70,000.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Additionally, the fourth Bitcoin halving on April 20 reduced mining rewards from 6.25 BTC to 3.125 BTC per block, potentially increasing BTC's value and profitability. Experts predict that Bitcoin will rise to $100,000 by the end of the year, with some estimates that it may reach $150,000 by 2025. Such a development could greatly increase El Salvador's BTC profits.
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