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El Salvador's President Nayib Bukele reiterated the country's determination to bet on Bitcoin, announcing that El Salvador will continue acquiring the cryptocurrency at a rate of 1 BTC a day until it “can no longer be bought with fiat currency.” This decision reflects El Salvador's unwavering belief in Bitcoin's long-term potential.
El Salvador bets its economic future on Bitcoin
In September 2021, El Salvador made history by becoming the first country to recognize Bitcoin as a legal tender alongside the US dollar. Since then, the government has redoubled its efforts to incorporate BTC into the national economic structure, ignoring the IMF's reservations.
Scheduled to be released in November 2022 “1 Bitcoin per day” program embodies El Salvador’s intention to build BTC reserves in the long term. The Bitcoins acquired each day will be stored in the same wallets that were recently used to secure the majority of the country's Bitcoin holdings.
For security reasons, the Salvadoran government recently moved the majority of its Bitcoin holdings to cold wallets, where they are kept in physical vaults within the country.
A winning strategy despite low adoption
Thanks to this regular buying strategy, El Salvador has benefited from the recent rise in Bitcoin prices. Holding 5,748 BTC worth over $360 million, the country has currently recorded a capital gain of $57 million.
While El Salvador's BTC reserves remain modest compared to other governments and companies such as MicroStrategy, the country is betting on Bitcoin as an asset destined to grow in value and usage in the future.
The recent launch of the Blockchain Explorer by the National Bitcoin Authority (ONBTC) further proves El Salvador’s commitment to transparency regarding BTC transactions.
El Salvador’s unwavering commitment to Bitcoin, embodied in daily purchases and ambitious goals, reflects the country’s faith in Bitcoin’s potential. Although adoption among the population is still limited, the government remains firmly committed to its strategy, believing that Bitcoin can be a driver of the country's economic growth.
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Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
