El Salvador is celebrating its three-year anniversary of adopting Bitcoin as legal tender. The country made history on September 7, 2021, by becoming the first nation to officially recognize Bitcoin as a form of legal payment.
Why El Salvador Chose Bitcoin
President Nayib Bukele introduced Bitcoin to the country to improve financial inclusion, make remittance payments easier, and attract financial innovation. By adopting Bitcoin, El Salvador aimed to give more people access to the financial system and embrace new technology in finance.
Since 2021, El Salvador has been buying Bitcoin regularly, with the country purchasing 1 Bitcoin every day. This strategy is known as dollar-cost averaging, where the country steadily increases its Bitcoin holdings over time.
As of today, El Salvador’s Bitcoin investments have grown significantly. According to the Nayib Bukele Portfolio Tracker website, the country has made over $31 million in profit. El Salvador bought its Bitcoin at an average price of $43,877 per Bitcoin, while Bitcoin’s current value stands at $54,300.
Overcoming Criticism
Despite early doubts and criticism, El Salvador’s Bitcoin decision appears to be paying off. Alex Momot, CEO of Peanut Trade, noted that the $31 million in profits shows that the move has been beneficial for the country’s economy.
El Salvador faced heavy criticism when Bitcoin dropped from its all-time high of $69,000 in November 2021. The country’s Bitcoin holdings were hit hard when the price fell as low as $16,000 during the bear market, especially after the collapse of the FTX exchange. However, the recent gains suggest that the decision to stick with Bitcoin is proving to be a long-term success.
