President Nayib Bukele’s Bitcoin purchasing plan has paid off for El Salvador, which is now up 70% on the dollar cost average purchase price following a recent Bitcoin spike.
El Salvador’s crypto treasury is currently $85 million in profit, according to the Nayib Tracker website, with Bitcoin values reaching a new all-time high above $72,000 on March 11.
The Central American government began purchasing BTC$71,963 in September 2021 after making the cryptocurrency legal tender in the country. At the time of the initial 200-coin purchase, Bitcoin was worth $51,769.
Bukele’s plan, however, was called into doubt after Bitcoin plunged from a high of $69,000 in November 2021 to as low as $16,000 in the subsequent bear market, dropping the portfolio deep into the negative.
However, it broke even again when BTC prices above the dollar cost average of $42,600 in February and has since rocketed into profit.
The portfolio, which includes 2,861 BTC, is currently worth $207.3 million.
On March 12, President Bukele commented that in addition to the profit, the country’s passport program generated Bitcoin revenue, as did the conversion of BTC to USD for local businesses, BTC mining, and government services.
However, it’s important to remember that the cryptocurrency market is inherently volatile. Bitcoin’s price could just as easily plummet, leading to significant losses for El Salvador. Additionally, critics point out that the profits currently only exist on paper and haven’t been realized through selling any Bitcoin.
Despite the risks, El Salvador’s President, Nayib Bukele, remains a vocal advocate for Bitcoin. He has repeatedly downplayed concerns about volatility and continues to purchase Bitcoin for the national treasury.
The long-term impact of El Salvador’s Bitcoin experiment remains to be seen. While the current profit is a positive sign, it’s crucial to monitor the situation closely and consider the potential risks involved. This is a developing story, and it will be interesting to see how El Salvador’s Bitcoin strategy unfolds in the coming months and years.
