El Salvador records 3 years of Bitcoin adoption with $31 million profit

Update September 7, 12:48 pm UTC: This article has been updated to include quotes from Harshit Gangwar.

El Salvador is celebrating the anniversary of Bitcoin and it has been three years since the country accepted Bitcoin as legal tender.

El Salvador became the first country in the world to adopt Bitcoin (BTC) as legal tender on September 7, 2021, three years ago to promote financial inclusion, facilitate efficient remittance payments and attract financial innovation.

President Naib Bukele's decision to accept bitcoin makes the country a historic digital asset pioneer, said Alex Momot, founder and CEO of crypto trading platform Peanut Trading.

He told Cointelegraph.

“El Salvador's experiment with Bitcoin can be seen as a success. The country became a pioneer, taking risks and trying new things. While it is too early to say whether all aspects of the reforms have been successful, it is clear that El Salvador has reaped some benefits.

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El Salvador in profit

El Salvador is investing in dollar-cost averaging into Bitcoin starting in 2021, buying 1 Bitcoin every day as part of its adoption plans.

According to Naib Bukele's portfolio tracker website, the country's wallet is currently sitting on a surplus of more than $31 million.

El Salvador bought Bitcoin holdings at an average of $43,877 per BTC. As of 10:55 am UTC, September 7, Bitcoin traded at $54,300.

According to Momot, despite the initial criticism of El Salvador's $31 million Bitcoin profit, the decision makes it a net positive from an economic perspective.

The CEO told Cointelegraph:

“This financial benefit further strengthens Buckel's position, as the initiative now appears to be yielding tangible benefits, and adds yet another justification for his bold cryptocurrency experiment.”

El Salvador currently has a total of 5,865 bitcoins worth more than $318 million, according to the country's treasury website.

President Naib Bukele's decision drew widespread criticism after Bitcoin fell from its previous all-time high of $69,000 in November 2021 following the FTX exchange crash. El Salvador's bitcoin holdings plunged into the red after bitcoin fell as low as $16,000 during the bear market.

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Why haven't major economies followed suit?

El Salvador's bold decision to accept Bitcoin as legal tender led to a wave of crypto investors from the countries, as Bitcoin's economic model favors early adopters.

However, only one more country has accepted Bitcoin as legal tender, while major economies remain skeptical.

In the year In April 2022, the Central African Republic became the second country to accept Bitcoin as legal tender and legalize the use of cryptocurrencies to strengthen the economy and financial inclusion.

Larger economies tend to shy away from Bitcoin adoption because they are dependent on their relationships with international lenders, Momot said.

“The bigger the country, the less likely it is to face such risks. Because large economies often depend on their relationships with international creditors, they strongly oppose such a move.

According to Harshit Gangwar, Head of Marketing and Investor Relations at Transk, El Salvador even in 2016

He told Cointelegraph.

“In hindsight, El Salvador was on track to formalize bitcoin as a daily currency and national investment, and subsequent institutional adoption in other international jurisdictions has confirmed this decision. Had El Salvador left bitcoin until today to become legal tender, it's fair to say there would have been much less pushback.”

Brazilian legislators have expressed their desire to establish a legal framework for Bitcoin adoption, but concrete regulations have not yet been developed.

Bitcoin in El Salvador: 1 year later | A big success or a failed experiment? Source: YouTube

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