40% Unrealized Profits Achieved Through Bitcoin Strategy
El Salvador’s President Nayib Bukele recently provided insights on X regarding the nation’s Bitcoin investments, revealing the potential for a profit margin of more than 40% from its holdings. Bukele emphasized that despite previous criticisms during Bitcoin’s price lows, the current market upswing would result in significant gains if the assets were liquidated at this time. However, El Salvador has no intentions of selling its cryptocurrency, as it adopted Bitcoin as legal tender alongside the U.S. dollar in September 2021.
The country’s Bitcoin acquisition strategy includes a citizenship program that expedites naturalization in exchange for Bitcoin donations, which has significantly contributed to its treasury. El Salvador currently holds 2,381 Bitcoins, purchased at an average price of $44,292. The current valuations suggest a substantial increase in investment value. The success of this strategic accumulation and the subsequent rise in Bitcoin’s market price have been further confirmed through the Nayib Bukele Portfolio Tracker, an online tool that provides real-time data on the country’s Bitcoin holdings and their cost basis.
Additionally, El Salvador’s financial standing has improved, with its bonds, particularly those due in 2052, trading above 80 cents on the dollar, according to FactSet data. This fiscal uplift aligns with the country’s unwavering approach to Bitcoin. President Bukele has reiterated the principle that “1 BTC = 1 BTC,” showcasing his commitment to the enduring value of cryptocurrency regardless of market volatility.
Bukele also highlighted the extensive negative coverage by mainstream financial outlets during the 2022 Bitcoin bear market, specifically focusing on El Salvador’s alleged losses. He contrasted this with their current silence now that the country is poised to realize significant profits. Bukele remarked, “When Bitcoin’s market price was low, they wrote literally thousands of articles about our supposed losses. Remember this, next time they spread lies about El Salvador.”
However, some skepticism has arisen, particularly from gold bug and Bitcoin critic Peter Schiff, who challenges the notion of El Salvador’s realized gains. Schiff suggests that profits should only be discussed once they are actually sold and the gains are realized.
Furthermore, Bukele’s administration has faced scrutiny and criticism from various quarters, including the International Monetary Fund (IMF), which has repeatedly advised against the adoption of Bitcoin as legal tender due to perceived risks and costs. Nevertheless, El Salvador remains resolute in its cryptocurrency strategy. The country plans to introduce Bitcoin-backed bonds and continue developing Bitcoin City, a proposed tax-free haven for crypto investments in the eastern part of the country.
El Salvador’s unwavering commitment to Bitcoin as legal tender demonstrates defiance against traditional financial criticisms. This stance is further supported by the country’s plans to issue passports to investors who contribute significant amounts in cryptocurrency, amidst ongoing debates over the broader implications for El Salvador’s economic and political landscape.
The continued embrace of Bitcoin as legal tender in El Salvador is further solidified by President Nayib Bukele’s recent re-election. Additionally, El Salvador’s Vice President Félix Ulloa has confirmed the continuation of Bitcoin as legal tender, along with other pro-Bitcoin initiatives.
