YEREVAN (CoinChapter.com) — El Salvador’s Bitcoin acquisition plan made headlines in June 2021, as the country was the first ever to establish a Bitcoin tender and adopt the crypto as state currency. Thus, the BTC price hitting $41,000 in December begs the question, has El Salvador’s risky plan finally paid off? Or is the Central American tech enthusiast still in the red? Let’s dive.
The El Salvador Bitcoin Stash is NOT Fully Disclosed
Yes, we can be fairly certain about El Salvador’s Bitcoin acquisitions from June 2021 to late 2022. At the time, President Nayib Bukele announced his plans to adhere to a country-level dollar cost averaging (DCA) plan. In other words, he committed to buy one Bitcoin every day.
In November 2022, El Salvador already owned 2,381 Bitcoins, purchased at an average price of roughly $44,300. However, the exact amount of Bitcoin the country owns is not clearly documented, as there is no public government record. Assuming El Salvador adhered to the daily purchase plan, the country’s holdings could have amounted to nearly 2,800 BTC in November 2023.
Despite the initial Bitcoin-led losses throughout 2022 and the overall high-risk crypto enthusiasm, poles show the public backed Bukele’s plan. A study by the Institute of Public Opinion (Iudop) of the UCA at the end of 2022 gave Bukele a grade of 8.37, reflecting a high approval rating from the citizens.
This high approval was attributed to his implementation of the exception regime to combat gangs and the absence of a significant political rival. Bukele was considered the official with the highest level of confidence at the national level, surpassing other institutions like the Armed Forces, which ranked second.
Bukele Mocks ‘Naysayers’
Thus, calculating whether El Salvador finally broke even with the Bitcoin gamble is not possible without a large error margin, as documents confirming El Salvador’s Bitcoin acquisitions are not publicly available. However, Bukele himself boasted a profit of over $3.6 million in a recent tweet.
Of course, we have no intention of selling; that has never been our objective. We are fully aware that the price will continue to fluctuate in the future, but this doesn’t affect our long-term strategy. Nonetheless, it is important that the naysayers and the authors of those hit pieces take back their statements.
commented Bukele.
The President added that the ‘naysayers’ should “issue retractions, offer apologies, or, at the very least, acknowledge that El Salvador is now yielding a profit,” just as they reported the incurring losses. However, Bukele’s Bitcoin portfolio stands at $131 million, per the graph above, less than even the initial $150 million investment in 2021.
As of Dec 5, Bitcoin price stood at $41,700, 30% higher than June 2021, after a choppy performance in between.
BONUS: El Salvador’s Known BTC Purchases
2021
- June 5: President Bukele announced a bill to adopt Bitcoin as legal tender at the Bitcoin Conference in Miami. The bill aimed to facilitate remittances and improve financial access for the underbanked.
- June 9: El Salvador’s Legislative Assembly voted to adopt the Bitcoin Law, making the cryptocurrency legal tender. The government set aside $150 million to back the country’s Bitcoin holdings.
- Sep 6: The government purchased 400 Bitcoins, worth about $20.9 million at the time.
- Sep 7: Bitcoin became legal tender in El Salvador, the first country in the world to do so. All businesses were required to accept it.
- September to December: Bukele purchased additional Bitcoins, including 150 BTC in September, 420 BTC in October, 100 BTC in November, 150 BTC in early December, and 21 BTC days before Christmas
2022
- January: El Salvador continued purchasing Bitcoin during its price dip, owning at least 1,801 BTC valued at $66 million as of this month. The country had spent about $85.5 million on Bitcoin between September 2021 and January 2022.
- March: The government announced the postponement of the “Volcano Bonds” project, partly due to the 2021–2022 cryptocurrency crash and global economic conditions.
- June: Bukele bought an additional 80 bitcoins. By this time, about $150 million, approximately 4% of the national reserves, had been spent on Bitcoin, approximately 2,300 coins.
