In a moment that has electrified the cryptocurrency world, Bitcoin (BTC) has crossed the $100,000 mark for the first time ever, and El Salvador is celebrating in a big way. The country, which made history in 2021 by becoming the first to adopt Bitcoin as legal tender, is now seeing significant unrealized profits from its Bitcoin holdings—gains that have exceeded $300 million. This milestone moment has placed El Salvador’s Bitcoin strategy back in the spotlight, with President Nayib Bukele using social media to show off the country’s impressive Bitcoin portfolio.
Let’s dive into the details behind El Salvador’s Bitcoin journey, its unrealized gains, and the ongoing pushback from global institutions like the International Monetary Fund (IMF).
Bitcoin Breaks $100K: El Salvador Rakes in Unrealized Gains
On December 5, Bitcoin hit an all-time high of $100,000, an achievement that sent waves of excitement through the global crypto community. For El Salvador, this wasn’t just another milestone in the crypto world—it was the latest proof that its controversial decision to adopt Bitcoin as legal tender was paying off.
El Salvador’s President, Nayib Bukele, has been vocal about the country’s Bitcoin investments, and he took to X (formerly Twitter) to share the latest update on their holdings. The numbers were staggering: since adopting Bitcoin as its official currency in 2021, the country has spent roughly $270 million to acquire a total of 6,180 BTC. As of the $100,000 price point, this portfolio is now worth a whopping $333 million, which means the country has made unrealized gains of over $60 million.
The Bitcoin Journey: From Legal Tender to Daily Purchases
El Salvador’s love affair with Bitcoin began on September 7, 2021, when the country officially made Bitcoin legal tender, meaning it could be used for all forms of financial exchange, just like the U.S. dollar. This bold move put El Salvador at the forefront of the crypto revolution, but it wasn’t without controversy. Many analysts and financial institutions questioned whether the country was taking on unnecessary risk by adopting a volatile digital asset.
But Bukele and his administration were undeterred. Just one day before the Bitcoin Law took effect, on September 6, 2021, the government made its first Bitcoin purchase—200 BTC at an average price of about $45,000 per coin.
Since then, El Salvador has continued to accumulate Bitcoin, with Bukele unveiling a dollar-cost averaging (DCA) strategy on November 17, 2022. Under this plan, El Salvador committed to buying one Bitcoin every day, regardless of the market price, which helps smooth out price volatility over time.
Tracking El Salvador’s Bitcoin Portfolio: Big Gains and Bigger Plans
According to Nayib Tracker, a platform dedicated to monitoring El Salvador’s Bitcoin investments, the country currently holds 6,180 BTC. At today’s market prices, this stash is up by 122%—meaning that El Salvador’s Bitcoin holdings have more than doubled in value since the country began purchasing the cryptocurrency.
But the gains don’t stop at Bitcoin’s rising price. Since adopting Bitcoin as legal tender, El Salvador has seen other benefits. For one, the move has boosted tourism in the country, with crypto enthusiasts and Bitcoin advocates flocking to El Salvador for its Bitcoin Beach initiative, which promotes Bitcoin adoption among local businesses and communities.
El Salvador has also leveraged its Bitcoin holdings to strengthen its position on the global stage, with President Bukele consistently advocating for the use of Bitcoin as a tool for financial inclusion and economic modernization. However, this bold Bitcoin experiment has not been without its critics.
IMF’s Pushback: Calls to Reconsider Bitcoin Adoption
While El Salvador’s Bitcoin strategy has brought some positive results, it hasn’t come without pushback from global financial institutions—most notably the International Monetary Fund (IMF).
The IMF has raised serious concerns about El Salvador’s Bitcoin policies, citing risks to the country’s financial stability and the broader economy. In January 2022, the IMF urged El Salvador to stop recognizing Bitcoin as legal tender, despite acknowledging the cryptocurrency’s potential to increase financial inclusion in a country with a largely unbanked population.
In an October 2023 update, the IMF renewed its call for El Salvador to scale back its Bitcoin policies. Julie Kozack, the IMF’s communications director, recommended that the country narrow the scope of its Bitcoin Law and limit the public sector’s exposure to the cryptocurrency. Kozack argued that Bitcoin’s volatility posed a risk to the country’s financial system, especially given the fact that the country’s budget and debt are still largely tied to the U.S. dollar.
El Salvador’s Response: Going All-In on Bitcoin
Despite the IMF’s ongoing objections, El Salvador is doubling down on its Bitcoin experiment. President Bukele has made it clear that the country has no intention of backing down from its commitment to Bitcoin. As the country’s Bitcoin portfolio grows, El Salvador remains committed to using Bitcoin to drive economic growth, attract new investment, and provide more access to financial services for its citizens.
Bukele’s vision for Bitcoin goes beyond just holding the cryptocurrency. The government has also created a Bitcoin Bond project to raise capital for infrastructure development, and there are plans for a Bitcoin-backed city in the near future. The vision is to turn El Salvador into a Bitcoin hub and a model for other countries looking to embrace digital currencies.
What’s Next for El Salvador and Bitcoin?
With Bitcoin breaking the $100,000 barrier and El Salvador’s Bitcoin portfolio showing impressive unrealized gains, the country’s bold gamble on crypto appears to be paying off—for now. The IMF’s warnings, however, remain a significant challenge, and the international community continues to debate the long-term impact of Bitcoin adoption on El Salvador’s financial system.
For now, though, El Salvador is standing firm in its decision to embrace Bitcoin, and it seems that the country’s Bitcoin journey is far from over. With growing unrealized profits, increasing tourism, and a focus on economic innovation, El Salvador could become a leader in the global movement toward cryptocurrency adoption.
Conclusion: El Salvador’s Bet on Bitcoin – A Bold Move That’s Paying Off
El Salvador’s Bitcoin experiment has undeniably transformed the country’s economic landscape in both visible and subtle ways. As Bitcoin breaks new records and El Salvador’s unrealized gains soar past $300 million, the country is in a unique position to leverage its Bitcoin holdings to boost growth and development.
But the road ahead remains uncertain, with the IMF continuing to urge caution. Will El Salvador’s bold Bitcoin bet pay off in the long run, or will the country face financial instability as it continues to embrace one of the world’s most volatile assets? Only time will tell, but for now, El Salvador is clearly on a path to Bitcoin-driven innovation—and they’re not looking back.
