El Salvador, Bitcoin $54,380.21It celebrates the third anniversary of its adoption as legal tender. On September 7, 2021, Bitcoin was recognized as the country’s official currency, a move aimed at achieving financial inclusion, facilitating remittance payments, and attracting financial innovation. This decision has made El Salvador a pioneer in the digital asset space.
Economic Return of Bitcoin
El Salvador continues to invest by regularly purchasing Bitcoin. While a daily Bitcoin purchase is made under the leadership of President Nayib Bukele, the country’s current Bitcoin portfolio has reached a value of over $318 million. While Bitcoin purchases are made at an average of $43,877 in the country, the current price of Bitcoin is around $54,300. Thanks to this price difference, a profit of $31 million has been made in El Salvador’s wallet. A Prize Pool Worth 21 Million TL Awaits You from BinanceTR! Participating and winning has never been easier.. You can sign up to BinanceTR from this link. Get your first crypto!
“El Salvador’s experiment with Bitcoin can be described as a success. The country took a pioneering step, took a risk and tried a radical innovation. While it is too early to say that all reforms have been successful, it is clear that El Salvador has reaped some benefits.”
— Alex Momot, CEO of Peanut Trade
Criticisms and Challenges
El Salvador’s Bitcoin push was initially widely criticized. The country’s Bitcoin portfolio suffered losses for a long time after the price dropped from its November 2021 peak of $69,000 to $16,000 following the FTX exchange crash. However, the current price rally appears to have offset those losses.
“This financial gain strengthens Bukele’s position because the initiative is seen to deliver tangible benefits. This adds an additional layer of validation to his bold crypto experiment.”
— Alex Momot, CEO of Peanut Trade
Attitude of Other Countries
While Bitcoin’s economic model favors early adopters, major economies have been reluctant to accept Bitcoin as legal tender. After El Salvador, the only country to do so was the Central African Republic in 2022, while other major economies have been hesitant to take the plunge.
“The larger a country is, the less likely it is to take such risks. This is because large economies are often dependent on their relationships with international lenders, and these institutions are opposed to such moves.”
— Alex Momot, CEO of Peanut Trade
In contrast, although Brazilian lawmakers have been interested in creating a legal framework for Bitcoin adoption, no concrete regulation has yet been implemented. Countries that remain hesitant to accept Bitcoin as an official currency are reportedly hesitant to take this step due to their relationships with large financial institutions.
El Salvador’s acceptance of Bitcoin as legal tender has sparked a global debate on the adoption of digital assets. Despite the positive economic outcomes, it is unlikely that major economies will take similar steps. The risky nature of cryptocurrencies like Bitcoin encourages cautious approaches, especially in countries that are dependent on international credit. However, El Salvador’s experience could serve as an example for small and medium-sized economies looking to take a bold step towards digital assets.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
