El Salvador is reaping the rewards of its Bitcoin gamble. According to data from the country’s Bitcoin Office, they hold 6,155 Bitcoins. With Bitcoin currently trading at $91,800 per coin, the total value of the portfolio has soared to $565 million, equivalent to 1.5% of the nation’s GDP.
Taking to Twitter, President Nayib Bukele of El Salvador seized the opportunity to respond to his critics regarding the country’s investment in Bitcoin. “I told you so,” he said.
The story began in 2021 when El Salvador made the bold move to use its treasury to “buy the dip” in Bitcoin. From November 2022, they even implemented a strategy of dollar-cost averaging, buying Bitcoin every day. “El Salvador started making profits from the Bitcoin investment in December 2023,” President Nayib Bukele stated.
This investment once raised concerns from the IMF about El Salvador’s financial situation. However, by August 2024, the IMF’s initial worries had subsided. The organization discussed with the El Salvador government a support program focusing on strengthening public finances, enhancing bank reserves, and managing risks associated with Bitcoin. While acknowledging that the implementation of Bitcoin has not met expectations, President Bukele asserted that it has not led to negative consequences.
Recently, El Salvador announced its third bond buyback of the year. They intend to repurchase bonds maturing between 2027 and 2034, with a total face value of over $2.5 billion. However, the funding mechanism for this transaction remains a mystery.
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