El Salvador has been accumulating Bitcoin since March 16, 2024, with a cold wallet believed to be owned by the Salvadoran government acquiring one Bitcoin every day, as per data from blockchain analytics platform Arkham Intelligence. This consistent buying strategy has added 162 Bitcoins to the country’s reserves, bringing the total to 5,851 as of August 23, 2024, with a current market value of approximately $357.2 million. The data also reveals a daily purchase pattern where most buys were for one Bitcoin, with a few instances where the amount purchased was less than $1.
Crypto analyst EmberCN estimates that the average cost per Bitcoin in El Salvador is around $44,835, presenting a potential upside of $93.45 million based on current market prices if the strategy continues. El Salvador’s president, Nayib Bukele, initiated this daily buying program in March 2024 and stated his intention to continue until Bitcoin becomes unaffordable. The government’s ambition extends beyond financial gain, with Bukele expressing no plans to sell the country’s Bitcoin holdings, as he believes in BTC’s potential for significant economic growth, potentially making El Salvador one of the richest countries in the world if BTC’s price continues to rise.
To ensure transparency, El Salvador’s National Bitcoin Office launched a website in May 2024 to track the Ministry of Finance’s coin holdings in partnership with mempool.space. Beyond direct purchases, El Salvador has utilized its geothermal energy to mine Bitcoin since 2021, with the nation’s volcanic power mining 474 BTC valued at approximately $29 million. Additionally, the National Bitcoin Office plans to provide Bitcoin training and certification to 80,000 government employees to deepen their understanding of Bitcoin. Previous initiatives include Bitcoin training programs and integration of Bitcoin education into public schools through the “My First Bitcoin” project since 2023.
Bitcoin, with a market capitalization of over $1.2 trillion, represents more than half of the total cryptocurrency market at 53.67%. The price of BTC has seen a slight increase of 5.7% over the past week. El Salvador’s innovative approach to incorporating Bitcoin into its economy showcases a forward-thinking strategy that aims to leverage the digital asset for economic growth and financial stability. With continued accumulation of Bitcoin reserves, investment in Bitcoin mining powered by geothermal energy, and initiatives to educate government employees and the public about Bitcoin, El Salvador is positioning itself as a pioneer in blockchain adoption on a national scale.
El Salvador’s commitment to Bitcoin is part of a larger plan to integrate the digital asset into various aspects of its economy and society. President Bukele’s vision for a Bitcoin-based economy goes beyond mere investment, with long-term goals of economic prosperity and financial inclusion for its citizens. By embracing Bitcoin as legal tender and actively accumulating and using the cryptocurrency, El Salvador is setting an example for other nations to explore similar paths towards digital asset adoption and innovation. As the country continues on this trajectory, it will be interesting to observe the impact of its novel approaches on economic growth, technological advancement, and global perception of blockchain technology.
