Bitcoin price fluctuates, El Salvador remains steadfast
Despite the recent sharp decline in Bitcoin prices due to the Mt. Gox repayment plan and the bleak economic outlook, with the entire network liquidated by $500 million, the El Salvadoran government is still buying one Bitcoin a day. According to BitInfoCharts, cold wallets controlled by the El Salvadoran government have been accumulating 1 Bitcoin per day since mid-March. This strategy was announced and implemented by El Salvador’s President Nayib Bukele, who moved the country’s Bitcoin reserves to cold wallets and made the wallet addresses public.
Source: Bitcoin Office El Salvador Bitcoin Reserve
At the time of writing, El Salvador held approximately 5,801.76 Bitcoins, worth approximately $316 million. Bugele called the wallet El Salvador’s “first Bitcoin piggy bank.” This is also the first time a president has publicly revealed El Salvador’s Bitcoin wallet address. Previously, he only updated information about new Bitcoin purchases on social platforms.
According to data from Nayib Tracker, the current average price of Bitcoin held by El Salvador is US$43,508.19. Calculated when the Bitcoin price drops to US$54,234.55, it still maintains a profit of approximately US$62.22 million, with an investment return rate of approximately 24.65%.
Source: Nayib Tracker Amount of Bitcoin held by El Salvador (in US dollars)
Daily Buying Strategy with Bitcoin Integration Plan
El Salvador’s Bitcoin buying strategy began on November 18, 2022, when Bugele announced that the country would purchase one Bitcoin per day. The launch of this strategy is another milestone after El Salvador became the first country to adopt Bitcoin as legal tender in September 2021. Bugele previously said that El Salvador is not just buying Bitcoin, but also accumulating Bitcoin through passport sales, currency exchange, mining operations and other government services.
According to Reuters, as of May 15, 2024, El Salvador had mined 473.5 Bitcoins using the geothermal energy of Tekapa Volcano. This mining plan using geothermal energy shows the country’s innovative efforts in renewable energy and cryptocurrency mining.
Additionally, El Salvador recently revealed plans to further integrate Bitcoin into its banking system. The government has reportedly submitted a reform proposal to establish a private investment bank that would allow Bitcoin and U.S. dollar business operations. This move will further promote the popularity and application of Bitcoin in El Salvador and solidify its position in the global cryptocurrency market.
In summary, despite the volatility in the Bitcoin market, the government of El Salvador has stuck to its original intention and continues to purchase Bitcoin on a daily basis. This strategy not only demonstrates El Salvador’s confidence in cryptocurrencies, but also reflects the country’s determination to promote digital economy and financial innovation. In the context of continued changes in the global cryptocurrency market, this firm stance of El Salvador will undoubtedly attract more attention and discussion.
