El Salvador became the first nation to accept Bitcoin as legal money in September 2021. Under the direction of Nayib Bukele, the government used Bitcoin in order to advance financial inclusion, expedite remittance payments, and strengthen the national economy. El Salvador started buying Bitcoin little by bit, buying one every day using a dollar-cost averaging approach.
El Salvador now has 5,865 Bitcoin, which it acquired at a cost of $43,877 on average. El Salvador's Bitcoin investment tracker indicates that the nation now has assets worth over $318 million, with the price of Bitcoin at $54,300. This shows that the success of the Bitcoin adoption generated a net $31 million profit in Bitcoin.
A $31 million Bitcoin profit boosts the economy of El Salvador
The successful acceptance of Bitcoin in El Salvador has resulted in notable financial advantages. The CEO of Peanut Trade, Alex Momot, claims that El Salvador's Bitcoin approach has produced noticeable results. "El Salvador's Bitcoin experiment can be seen as a success... it's clear that El Salvador has reaped some benefits," he said.
It has shown to be beneficial to hold Bitcoin and stick to a regular buying schedule. El Salvador's $31 million Bitcoin profit highlights the advantages of the nation's Bitcoin economic policy. The nation's Bitcoin holdings have enhanced Nayib Bukele's standing and the government's stance on cryptocurrencies.
As smaller countries embrace Bitcoin, larger economies tremble.
Although El Salvador has been successful in adopting Bitcoin, other larger economies have not done the same. Major economies are still hesitant, despite the fact that smaller countries—like the Central African Republic—became the second to accept Bitcoin as legal cash in April 2022.
Larger nations are not likely to take the same chances, according to Momot, because they depend on foreign creditors, who are generally opposed to the use of Bitcoin as legal cash. Though no real action has been taken, nations like Brazil have expressed interest in creating a legal framework for the adoption of Bitcoin.
El Salvador's Bitcoin Approach in the Face of Market Volatility
There have been difficulties in El Salvador's Bitcoin journey. After the FTX exchange failed in 2022, the price of Bitcoin fell to $16,000, losing El Salvador's investment. But the nation persisted in using a dollar-cost averaging strategy for Bitcoin, buying more of the cryptocurrency amid downturns in the market.
El Salvador's treasury website states that the nation possesses 5,865 Bitcoin, which is worth about $318 million.
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