Since establishing Bitcoin as the national legal tender in 2021, El Salvador has been steadily accumulating Bitcoin. Since March 16 this year, the Salvadoran government has purchased 1 Bitcoin every day.
According to Arkham Intelligence, as of August 23, the Central American country already holds 5,852 bitcoins, worth $361 million. Arkham Intelligence also revealed the daily purchase patterns of the country's government-specific wallets. Interestingly, while most purchases are for 1 bitcoin, there are also some purchases for less than $1.
Crypto analyst EmberCN posted on August 23rd that the average cost of Bitcoin for the Salvadoran government is about $44,835. Based on the current market price, it has gained a profit of $93.45 million (+35%).
According to public information, the amount of Bitcoin held by the Salvadoran government ranks fifth in the world, after the governments of the United States, China, the United Kingdom and Ukraine. However, unlike the aforementioned countries, which mainly acquired Bitcoin through confiscation, the Salvadoran government should rank first in the world in terms of active purchases.
El Salvador’s President Nayib Bukele said the country’s BTC purchase plan will continue until Bitcoin becomes “unaffordable.” He also made it clear that he has no plans to sell BTC and firmly believes that BTC has significant growth potential. Some experts predict that if BTC prices continue to rise, El Salvador is expected to become one of the richest countries in the world. Since taking office in 2019, Bukele has attracted attention for his policies aimed at reducing gang violence and accepting Bitcoin as legal tender - groundbreaking and controversial moves globally.
Since establishing Bitcoin as the national legal tender in 2021, President Bukele has been an active advocate of cryptocurrency adoption and hopes to use cryptocurrency to drive national economic growth. The government has launched a number of initiatives, including launching the Chivo crypto wallet and investing in Bitcoin, using volcanic geothermal energy for Bitcoin mining, and launching "volcanic bonds" backed by Bitcoin.
In addition to direct purchases, El Salvador also mines Bitcoin using volcanic geothermal energy. Since 2021, the country has mined 474 BTC, worth about $29 million. President Bukele recently announced that his government has moved a large portion of its Bitcoin inventory to cold wallets, the so-called Bukele "Bitcoin Piggy Bank", in accordance with a safe storage plan. The transfer plan is intended to enhance the long-term security of the country's national digital assets and protect them from potential cyber threats. In order to transparently inform its citizens about Bitcoin transactions, the El Salvador National Bitcoin Office launched a website in May 2024 to track the country's Treasury's Bitcoin holdings in cooperation with organizations that publish Bitcoin transaction data.
Despite facing criticism, concerns and even scrutiny from the International Monetary Fund, Bukele was re-elected as president in February with more than 85% of the vote, reflecting broad support from the country's people. Bukele's second term will focus on further integrating Bitcoin into the national economy and ensuring that El Salvador is at the forefront of cryptocurrency adoption. In March, El Salvador announced the launch of the "Bitcoin City" construction. Turkish holding company Yilport will invest $1.62 billion in two seaports in El Salvador and establish a mixed-ownership company with El Salvador to operate a joint venture for 50 years.
To deepen Bitcoin understanding in the public sector, El Salvador’s National Bitcoin Office will provide Bitcoin training and certification to 80,000 government employees. “Thousands of public servants in El Salvador will soon be educated on Bitcoin to the highest standards,” National Bitcoin Office Director Stacy Herbert announced in an August 20 social media post. “This will have a cumulative effect where excellence breeds excellence in El Salvador, the birthplace of a new Bitcoin market.”
Previously, El Salvador has organized Bitcoin training programs and incorporated Bitcoin education into public schools. Since 2023, the “My First Bitcoin” project has been included in the school curriculum to educate the younger generation about digital assets.
As the first country in the world to adopt Bitcoin as legal tender, El Salvador's Bitcoin experiment continues to face international challenges.
The International Monetary Fund has been in a long-running dispute with El Salvador, having previously recommended that the country reverse its decision to adopt Bitcoin as legal tender; in a statement earlier this August, the IMF called on the country to increase transparency in its Bitcoin adoption process, emphasizing that more measures need to be taken to mitigate potential risks posed by unprecedented monetary policy.
U.S. lawmakers have also repeatedly stated that they believe El Salvador’s adoption of Bitcoin could pose a threat to U.S. interests.
