Elon Musk Praises El Salvador's Successful BTC Strategy
El Salvador President Nayib Bukele responded to criticism regarding the country’s Bitcoin strategy by announcing that the nation’s Bitcoin reserves have gained unprecedented value. Following Bitcoin's long-awaited surge past the $100,000 mark, El Salvador's Bitcoin portfolio has reached $603.34 million. The average cost of the country's Bitcoin reserves is known to be $269.74 million, indicating that El Salvador has an unrealized gain of $333.60 million based on the current price.
A significant portion of these gains occurred this year, with the portfolio growing by 117.7% since January 2024. This increase aligns well with Bitcoin’s 141% growth since the beginning of the year. El Salvador faced considerable criticism when it adopted Bitcoin in 2021. Initially focused on risks, the criticisms seemed justified during the bear markets of 2022 and 2023. However, President Bukele continued to accumulate Bitcoin despite the criticisms, and this bold decision is now bearing fruit. Elon Musk also praised El Salvador's strategy as "impressive."
Elon Musk’s Praise for El Salvador’s Bitcoin Strategy El Salvador has become one of the countries using Bitcoin as its largest state reserve, currently holding approximately 74,000 BTC. The government plans to use Bitcoin as a hedge against inflation and as a strategic reserve to promote economic growth. The country drew the attention of global crypto investors with its “Volcano Bonds” launched in 2022, contributing to the financing of Bitcoin reserves.
Musk noted that he found these strategic steps and the vision behind El Salvador's adoption of Bitcoin as legal tender to be impressive. He emphasized that these moves could serve as a precedent for other countries exploring digital assets. Nevertheless, despite all the accolades, Bitcoin's volatility and uncertainties in global crypto markets pose risks that could jeopardize El Salvador’s economic strategy.
El Salvador continues to support the integration of cryptocurrencies through Bitcoin ATMs, the Chivo Wallet, and tax incentives for the crypto business sector. Musk's positive remarks may lead other countries to reassess their perspectives on digital assets.