SAN SALVADOR (El Salvador), Dec 6: As bitcoin reached unprecedented levels, exceeding USD 100,000 for the first time, El Salvador’s President Nayib Bukele expressed his elation on Thursday regarding his significant investment in the cryptocurrency.
The endorsement of bitcoin—as legal tender in the Central American country since 2021—has not entirely aligned with the president’s optimistic outlook, yet the value of the government’s acknowledged investment has soared beyond USD 600 million.
Bitcoin has surged dramatically following Donald Trump’s recent election win, breaching the USD 100,000 threshold Wednesday night right after the president-elect announced plans to appoint cryptocurrency supporter Paul Atkins as the new chair of the Securities and Exchange Commission.
Only two years prior, bitcoin’s unstable market value dropped below USD 17,000. By Thursday afternoon, however, the value had retreated back under USD 100,000, settling just above USD 99,000 by 3 pm ET.
Bukele attributed the failure of many Salvadorans to capitalize on the profit opportunities to the political opposition that he claims has hindered progress.
Street protests erupted when Congress legalized bitcoin in June 2021, although the demonstrators had multiple grievances beyond this single issue.
The small Central American nation has traditionally utilized the dollar as its currency, but Bukele promised that bitcoin would unlock new possibilities for the unbanked population while eliminating costs for money transfer services utilized by Salvadorans working abroad. The government incentivized registration for digital wallets with a USD 30 bitcoin bonus.
Although many people signed up, they often opted to convert the cryptocurrency immediately into cash.
“It’s crucial to highlight that the opposition not only made significant errors regarding bitcoin, but this time their opposition has had an impact on many individuals,” Bukele posted on Facebook.
Bukele received an “impressive” comment from Elon Musk on the social media platform X on Thursday.
On the same day, El Salvador’s former Central Bank President Carlos Acevedo noted that while there was a notable gain, it would only be realized once the government sold its bitcoin. Nevertheless, he acknowledged Bukele’s administration for its performance with bitcoin, especially considering Trump’s election.
Acevedo suggested that “the markets’ optimism about a Trump administration being favorable to market conditions and specifically bitcoin” accounted for its sustained increase over the past month.
However, he cautioned that the cryptocurrency’s inherent volatility remains a continuous risk.
“The average Salvadoran does not engage with bitcoin, although there are affluent Salvadorans who have previously invested in it, yet they constitute a small segment,” Acevedo remarked.
Esteban Escamilla, who works at a clothing store in Santa Tecla, near the capital San Salvador, recounted that he exchanged the initial USD 30 in bitcoin he received in 2021.
“I don’t use bitcoin as I lack funds to invest and speculate, but I know its value has greatly increased,” he admitted, conceding that holding onto it would have resulted in more money now.
Josefa Torres, 45, while grocery shopping, expressed that she also did not possess any bitcoin. “I withdrew the funds and applied them to my household expenses,” she mentioned.
At the conclusion of discussions between the International Monetary Fund and El Salvador’s Government in August, the IMF released a statement that acknowledged the country’s bitcoin assets. (AP)
