Three years of official cryptocurrency status has taken its toll. The Salvadoran government began buying bitcoins in an effort to capitalise on the coins' long-term appreciation. At first, this strategy yielded only unrealised losses and then went into negative territory for a long time. However, now the purchased BTCs can be sold in the plus side, earning tens of millions of dollars.

Current status of the Bitcoin portfolio of the El Salvador board of directors

El Salvador has also attracted media attention, international investment and the interest of innovation-related companies. With this in mind, analysts see Bukele’s long range strategy as a winning one. In addition, it could well serve as a model for other troubled economies.

Bitcoin adoption in El Salvador

Nayib Bukele’s decision to make Bitcoin an official means of payment has turned El Salvador into a historic pioneer in terms of digital asset adoption.

Alex Momot, founder and CEO of trading platform Peanut Trade, said this in an interview with Cointelegraph. Here is his rejoinder on the matter.

El Salvador’s experiment with Bitcoin can be considered a success. The country has acted as a pioneer by taking a risk and trying something radically new. While it is too early to say whether all aspects of the reform have been successful, it is clear that El Salvador has reaped certain benefits.

At the same time, it can be assumed that the recognition of Bitcoin as a means of payment was more of a PR stunt for the whole state than a really useful step for ordinary citizens. Stablecoins are better suited for preserving value, and spending BTC is hardly a good idea for residents of a country with a troubled economy. Still, in such conditions investments are a luxury, and spending accumulated digital assets would be an even stranger solution.

Mention of Bitcoin in El Salvador

In total, as of today, the government of El Salvador has acquired an estimated 5,867 Bitcoins worth $311 million, with the country set to acquire 1 BTC every day since 18 November 2022, which was also announced by Bukele on that day.

The government cryptocurrency wallet’s total revenue by position exceeds the $33 million mark, equivalent to 24.7 percent growth. Coins were purchased at an average price of $43,884.

According to Momot, El Salvador’s profit makes the legalisation of BTC a positive decision from an economic point of view, despite initial criticism. He continues.

This financial gain further strengthens Bukele’s position, as the initiative now clearly has tangible benefits, adding more validation to his bold experiment.


Perhaps it is too early to talk about "tangible benefits". Either way, the country is accumulating digital assets with no definite plans to spend them, and the growing unrealised gains on El Salvador's BTC are hardly improving the lives of ordinary people in the country. Besides, after the start of a new bearish trend, the position is likely to go negative, so here we are talking at best about strengthening the government's position in the tourism niche.


The story of the Salvadoran government’s wallet balance sheet

President Nayib Bukele’s decision did draw criticism after Bitcoin began a prolonged downtrend in November 2021. It led to the collapse of multiple cryptocurrency companies – including major exchange FTX. Eventually, Bitcoin’s price hit a low of $15,476, and El Salvador’s investments were in deep negative territory.

Shortly after the El Salvador government’s bold decision, other countries were expected to adopt Bitcoin as legal tender. Since then, however, only one nation has taken that step: in April 2022, the Central African Republic became the second country to legalise Bitcoin as a means of payment.

Large countries are unlikely to accept BTC because of their dependence on relationships with international lenders, Momot explains.

The larger the country, the less likely it is to take that risk. This is because large economies often depend on relationships with international lenders, who are strongly opposed to such moves.

El Salvador’s President Nayib Bukele

According to Transak’s head of marketing and investor relations, Harshit Gangwar, even El Salvador was pressured by the International Monetary Fund to reverse its decision on Bitcoin.

Obviously, the reason for this is the volatility of the cryptocurrency, which can drastically affect the overall balance sheet situation of a portfolio of digital assets.

In hindsight, El Salvador was a pioneer in normalising Bitcoin as an everyday currency and national investment, and the subsequent institutional adoption in other parts of the world has confirmed this decision.

El Salvador’s President Nayib Bukele

All in all, the refusal to accept BTC on a national level is not necessarily bad news. One way or another, Bitcoin and cryptocurrencies in general remain a sane alternative to the traditional economy.

And linking centralised state-like entities to them is definitely not what the same anonymous creator of the first cryptocurrency under the pseudonym Satoshi Nakamoto was aiming for.


Perhaps the legalisation of Bitcoin in El Salvador was a high-profile event only within the cryptocurrency community. Still, ordinary people who were not interested in digital assets and are facing financial problems amid economic problems are unlikely to interact with BTC. And Bitcoin itself is more associated with digital gold and accumulation, i.e. it is not particularly suitable for everyday spending.
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There are more interesting things in our crypto chat. There we will discuss other important events that affect the current bullrun in the blockchain industry.