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El Salvador’s Bitcoin Bet Pays Off with $100M in Profits

El Salvador’s ambitious Bitcoin experiment has finally yielded significant gains. President Nayib Bukele, who made Bitcoin legal tender in 2021, proudly announced this week that the country has amassed $100 million in unrealized profits as Bitcoin’s price surged to new highs. “I told you so,” Bukele tweeted, celebrating a victory that comes two years after his initial, controversial decision to integrate Bitcoin into El Salvador’s economy.

The country’s Bitcoin holdings, valued at approximately $516.43 million, reflect an unrealized profit of around 20%, or $100.65 million, according to data from SpotOnChain. This gain marks a turning point for Bukele, who previously faced criticism from entities like the International Monetary Fund (IMF) and media outlets like Bloomberg, which labeled El Salvador’s Bitcoin experiment a failure in 2022. Bukele responded defiantly, dismissing the critiques as “full of lies.”

A Bold Bitcoin Strategy

El Salvador began its Bitcoin journey in September 2021, purchasing the cryptocurrency at around $51,000 per coin. Over the following year, the government continued to acquire Bitcoin, later committing to a unique “one BTC per day” purchase strategy after the collapse of FTX. At the time this pledge started, Bitcoin was valued at roughly $16,600. Since then, Bitcoin has soared to an all-time high of $89,000, representing a 436% increase since El Salvador’s daily buying strategy took effect.

Despite these unrealized gains, selling off such a substantial amount of Bitcoin could lead to “slippage,” a drop in profit due to the difficulty of offloading large quantities without impacting market price. However, Bukele has stated that El Salvador has no intention of selling its Bitcoin holdings anytime soon.

A Turnaround Thanks to Market Dynamics and Political Shifts

El Salvador’s Bitcoin holdings were recently at a $14 million loss on November 4, according to SpotOnChain. But the asset’s price skyrocketed following the reelection of Donald Trump, a noted pro-crypto politician, as U.S. President. Investors expect that Trump’s administration will promote a more favorable regulatory environment for digital assets, igniting optimism in the crypto markets.

The U.S. could potentially follow El Salvador’s lead in holding Bitcoin as a national reserve. Senator Cynthia Lummis of Wyoming has proposed a plan for the U.S. to acquire 5% of Bitcoin’s supply over five years, similar to El Salvador’s strategy of Bitcoin accumulation.

El Salvador’s Broader Crypto Vision

Beyond holding Bitcoin as legal tender, El Salvador has also embarked on innovative projects to support its crypto vision. The nation has launched Bitcoin mining operations powered by volcanic energy and introduced “volcano bonds” as part of its sustainability efforts. El Salvador’s experiment with Bitcoin extends far beyond mere investment; it has fundamentally transformed how the country approaches economic growth and energy use.

The country’s commitment to Bitcoin appears to have garnered popular support, as evidenced by Bukele’s re-election in February this year. As Bitcoin continues to grow in value, so does El Salvador’s return on its crypto investments, proving Bukele’s strategy fruitful despite initial skepticism.

El Salvador’s $100 million unrealized profit from Bitcoin underscores the potential rewards of its bold economic experiment. With Bitcoin now firmly integrated into the country’s financial system, El Salvador’s success may pave the way for other nations exploring digital assets as a means of economic growth. As the crypto landscape evolves, El Salvador’s pioneering approach stands as a testament to the power of unconventional thinking and long-term commitment.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Bullish Times is a marketing agency committed to providing corporate-grade press coverage and shall not be liable for any loss or damage arising from reliance on this information. Readers should perform their own research and due diligence before engaging in any financial activities.

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