El Salvador President Says Bitcoin Investment Profit Exceeds $3 Million
Bitcoin prices remained in a sideways state for a considerable time. However, the flagship crypto has now started to gain price momentum. On this account, the state reserves of El Salvador have started to turn a profit.
It is important to note that former President Nayib Bukele nominated Bitcoin as a legal tender in the region to combat economic constraints.
During his reign, the country generated a government-based Bitcoin reserve. The reserve is now valued at $131 million with a net profit reading of $3.6 million and gained 2.84% as of 4th December. He noted that the government does not have an intention to sell the Bitcoin reserves.
Furthermore, he stated that the administrators are aware of the price fluctuations of the digital currency going forward. However, the state will manage the Bitcoin reserves in line with its long-term trading strategy.
President Bukele Resigns to Prepare for Next Elections
Bukele recently resigned from his position as the president of the region following acquiring approval from the legislative assembly. Therefore, he is currently on a leave of absence and preparing for a reelection campaign for 2024.
During his term, he purchased Bitcoins using funds from national treasury. The first investment in BTC was valued at $10.3 million. However, in 2022 Bitcoin prices declined more than 50%.
Nevertheless, Bukele continued to increase Bitcoin national reserves based on a dollar-cost averaging strategy. During 2022, he made several BTC purchases. At one occasion, the BTC portfolio value fell to $45 million from $103 million. The nation gained mass popularity in 2021 after promoting Bitcoin as legal tender.
Bitcoin adoption also brought some criticism to the nation from institutes such as International Monetary Fund. IMF issued a warning regarding El Salvador’s Bitcoin reserves not generating profits on account of limited adoption within the country.
El Salvador Continues Bitcoin Adoption Despite Setbacks
There are some reports where the local population and businesses faced issues in shifting the legal tender to Bitcoin. On the other hand, private reporters such as Joe Hall claimed that he was unable to make everyday transactions using BTC while traveling.
However, the government of the nation has plans to set policies to ensure hassle-free BTC adoption. One such policy is Bitcoin education program that will be offered in state-backed schools.
State-Issued Wallet Project
The country also launched state-issued digital wallet project that allowed the citizens to create addresses using their national-issued IDs. The government incentivized the citizens with free BTC giveaways to sign-up for the digital wallet.
However, some reports revealed issues with the administration of the wallet project. On the other hand, Bukele also plans to funds a geo-thermal power plant using profits generated from the national BTC reserves.
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