By El Salvador’s Bitcoin (BTC) investment strategy is paying off handsomely, with the country now enjoying a remarkable 70% profit on its dollar-cost average purchase price.
Following a recent Bitcoin rally, El Salvador’s crypto treasury has surged to $85 million in profit, as reported by the Nayib Tracker website.
The impressive growth coincides with Bitcoin’s record-breaking surge above $72,000 on March 11.
Bukele’s Bitcoin Investment Strategy
President Nayib Bukele initiated the Bitcoin buying strategy in September 2021 when the Central American nation officially embraced Bitcoin.
During the initial purchase of 200 coins, Bitcoin was trading at $51,769.
However, the strategy faced criticism when Bitcoin experienced a subsequent decline from its peak of $69,000 in November 2021, plummeting to as low as $16,000 in the ensuing bear market and pushing the portfolio into deep losses.
Despite the initial setbacks, the investment portfolio rebounded when BTC prices surpassed the dollar-cost average of $42,600 in February, resulting in substantial profits.
Currently, the portfolio comprises 2,861 BTC, valued at $207.3 million.
President Bukele highlighted that the profits derived from Bitcoin extend beyond the investment gains.
El Salvador has also generated revenue through the country’s passport program, the conversion of BTC to USD for local businesses, Bitcoin mining activities, and various government services.
In December, El Salvador enacted a migration law offering expedited citizenship to foreigners who make Bitcoin donations to support government social and economic development programs.
Additionally, the country ventured into Bitcoin mining in October through a partnership between Volcano Energy and Luxor Technology, establishing its first Bitcoin mining pool.
El Salvador Could Use Bitcoin Profits to Pay Off IMF Debt
There are optimistic projections that if Bitcoin reaches $100,000, El Salvador may even be able to pay off its loans to the International Monetary Fund (IMF).
This has led some, including venture capitalist Tim Draper, to believe that the nation will soon achieve financial independence.
Fun interview with @Rachelwolf00 . We get into #bitcoin #web3 #NikkiHaley2024 #freedom and #trust . https://t.co/bnyKB5hsy9
— Tim Draper (@TimDraper) March 8, 2024
President Bukele, who recently secured a resounding victory in the February Presidential election, has criticized the media for its previous skepticism.
“When Bitcoin’s market price was low, they wrote literally thousands of articles about our supposed losses.”
As reported, Bukele has vowed to push forward with his plans for Bitcoin after securing a second term in the upcoming election.
The administration’s future plans include launching Bitcoin-backed bonds in the first quarter of 2024, constructing a tax-free crypto haven known as Bitcoin City in the eastern part of the country, and issuing passports to investors who contribute the equivalent of $1 million in cryptocurrency.
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender, a move that faced criticism from various quarters, including the IMF.
Aside from El Salvador, some other big investors in the cryptocurrency have also seen their profits reach billions.
MicroStrategy, one of the largest institutional holders of Bitcoin, has seen its unrealized profit soar to around $5 billion.
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