El Salvador has the potential to see a remarkable increase in its gross domestic product (GDP) if it continues to embrace Bitcoin (BTC) and artificial intelligence (AI) adoption under President Nayib Bukele, according to Cathie Wood, the CEO of ARK Invest. Wood expressed her belief that El Salvador’s real GDP could grow tenfold over the next five years, making it an attractive destination for the Bitcoin and AI communities. During a meeting with Bukele, Wood discussed the integration of Bitcoin into capital markets, AI, and tax policies. Max Keiser, a Bitcoin advisor to Bukele, stated that Wood presented data on how El Salvador could achieve a $300 billion GDP by 2029. Other attendees at the meeting included Bitcoin advocate Stacy Herbet, US economist Arthur Laffer, and ARK Invest research associate Marc Seal.
El Salvador’s GDP in 2022 was $32.4 billion, which has increased by more than 30% since Bukele took office in June 2019. If the GDP reaches $300 billion, it would bring El Salvador’s economy on par with countries like Romania, the Czech Republic, and Chile. Since Bukele’s presidency, El Salvador has made Bitcoin legal tender, eliminated taxes related to tech innovation, and removed income tax for foreign investments and remittances. In 2024, Google expanded into the country through a strategic partnership worth $500 million. El Salvador currently holds 5,764 Bitcoin in its treasury, valued at $396.2 million.
However, the adoption of Bitcoin among the local population has faced challenges. A lack of technical literacy, difficulties in merchant enforcement, and issues with the rollout of El Salvador’s Chivo Wallet have slowed progress. According to a survey conducted by José Simeón Cañas Central American University, only 12% of the local population used Bitcoin for transactions in 2023. Despite this, recent months have seen an increase in merchant adoption, led by major brands like Walmart, Starbucks, and Dominos.
In conclusion, El Salvador’s potential economic growth through Bitcoin and AI adoption has garnered attention, with Wood predicting a tenfold increase in GDP. While challenges remain in terms of local adoption, efforts are being made to overcome these obstacles and drive progress in the country’s digital economy.