El Salvador’s Government Reports $85 Million in Profit Following Bitcoin Rally
El Salvador, the nation that gained international popularity for making Bitcoin legal tender, has continued to increase its treasury. On this account, the government recently reported a profit of $200 million.
At the same time, according to the latest news the state is working on various initiatives to add more Bitcoins in the national treasury. On this matter, President Nayib Bukele recently commented that the buying strategy of the country has paid off.
After taking the office for the second time, Bukele noted that the Bitcoin reserves of the nation are now generating a 70% profit on dollar cost averaged cost price. It is important to note that he attributed the recent gains to the recent Bitcoin rally.
The official statistics issued by the treasury department indicate a $85 million profit. Bukele quoted projections from the Portfolio Tracking site that indicated Bitcoin printing a new ATH at $72K.
El Salvador started its Bitcoin purchasing spree in September, 2021. Around the same time, the country passed the bill to make Bitcoin a legal tender. When the nation undertook the Bitcoin project two years ago, they made the first purchase of 200 Bitcoins.
At the time, BTC was valued at $51,769. The Cointelegraph report indicates that Bukele’s Bitcoin purchase has been called to question on various occasions.
El Salvador to Move Ahead with Bitcoin Purchasing Strategy
El Salvador started Bitcoin purchases around the time when Bitcoin recorded a new ATH of $69K in November, 2021. In the ensuing bear run, the flagship cryptocurrency dropped to $16K. This occurrence led to massive losses for the national Bitcoin treasury.
However, Bitcoin prices crossed the DCA cost of $42,600 in February and restored the treasury to green. At present, the treasury holds around 2861 Bitcoins that are valued at $207.3 million.
On 12th March, Bukele announced that in addition to the spot market profits Bitcoin was also used to generate national income from the passport program. The treasury intended to convert Bitcoin earned from this program to USD and invest in local business.
In the same manner, the nation was also planning to use the revenues generated from Bitcoin mining and the income from government services in the same way.
El Salvador also passed a migration law in December that offered citizenship options for foreigners by the way of making donations in the form of Bitcoin. These donations were aimed at the government and used for social and economic development. In October, the country launched the first-ever Bitcoin mining pool with partnership with Volcano Energy and Luxor Technology.
El Salvador to Pay Off Debts with Bitcoin Investment Strategy
The analysts at Cointelegraph suggest that if Bitcoin reaches a new ATH of as high as $100K, the nation could be able to pay off debts received from the International Monetary Fund. Another observation from analyst Tim Draper indicated that the nation was on its way to becoming a financial independent. Bukele has been reelected to the President’s office after a landslide victory in February.
He questioned the approach of the media about criticizing the Bitcoin investment strategy of the country when Bitcoin prices were low. Presumably, there have been articles regarding lack of public transparency for national Bitcoin reserves.
Bitcoin City Project
At the same time, some media articles reported issues among local business and citizens who did not understand Bitcoin utility and working. The nation announced volcano bonds to start a renewable energy initiative as part of its Bitcoin city project.
At the same time, some media reports stated issues with government-issued wallets called Chivo. According to some articles, the Bitcoin reserves of the citizens were disappearing from the Chivo wallet. For context, it is important to note that Bukele promoted the wallet with a promise of granting free Bitcoins to citizens to encourage more sign-ups.
However, regardless of all these obstacles the nation has finally managed to generate profits with Bitcoin initiative after the ensuing Bull Run.
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