El Salvador’s Bitcoin Journey: Reflecting on Three Years of Change
Three years ago, President Nayib Bukele’s decision to make Bitcoin (BTC) legal tender in El Salvador made headlines around the globe. On September 7, 2021, the “Bitcoin Law” came into effect, making El Salvador the first country to adopt Bitcoin as an official currency.
Since then, the nation has experienced significant economic and social shifts, highlighting the impact and potential of this bold move.
The Rise and Fall of Bitcoin’s Value: Impact on El Salvador
El Salvador’s embrace of Bitcoin has been mixed with challenges and successes. The country now holds over $411 million in Bitcoin, with a more than 5,772 BTC portfolio.
Read more: Who Owns the Most Bitcoin in 2024?
President Nayib Bukele was recently sworn in for a second term, reinforcing his pro-Bitcoin stance. The country has continued to purchase Bitcoin, acquiring up to 30 BTC per month. As of May, El Salvador had more than $70 million in unrealized profits from its Bitcoin investments.
“Let’s not lose perspective. Here we are not just changing a country, we are changing a paradigm. We have already accomplished more than anyone could have imagined. Other people would like to have what we have now,” Bukele declared during his re-election.
Despite the crypto market’s volatility, El Salvador’s government remains unwavering in its support for Bitcoin. The government has preserved its Bitcoin holdings and consistently invests in them. Moreover, El Salvador continues to integrate the asset into various sectors of the economy.
For instance, Salvadorian citizens can use BTC to pay for goods and services, taxes, and even through the official Chivo Wallet. The government has also implemented policies and incentives to attract crypto investments, including citizenship and mining services passports.
El Salvador has also invested in Bitcoin mining using volcanic energy. The state plant on the Tecapa volcano operates around 300 processors, capitalizing on the country’s geothermal resources. This investment comes when Bitcoin’s mining difficulty has reached an all-time high, highlighting the nation’s innovative approach.
Recent developments have further strengthened El Salvador’s Bitcoin journey. First, the first Bitcoin spot exchange-traded funds (ETF) approval in January 2024 raised BTC’s price from $41,670 to over $70,000 in just a few months.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Additionally, the fourth Bitcoin halving on April 20 reduced mining rewards from 6.25 BTC to 3.125 BTC per block, potentially increasing BTC’s price and profitability. Experts predict Bitcoin could rise to $100,000 by the end of the year, with some estimates suggesting it could reach $150,000 by 2025. Such growth could significantly boost El Salvador’s BTC profits.
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