El Salvador has unveiled its own website to showcase its Bitcoin reserves and provide real-time data on the nation’s holdings. The Central American country currently holds 5,748 BTC, valued at around $360 million. Over the past week, El Salvador has purchased seven BTC worth over $438,000, and in the last 30 days, it has added a total of 31 BTC worth $1.94 million. These purchases align with the country’s goal of acquiring 1 BTC per day for its treasury.
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender. The government’s decision to embrace Bitcoin aims to promote financial inclusion, streamline remittance payments, and attract financial innovation. However, President Nayib Bukele faced criticism when Bitcoin’s price plummeted from its previous high of $69,000 after the collapse of the FTX exchange in November 2021. As a result, El Salvador’s Bitcoin holdings suffered significant losses during the bear market, with Bitcoin dropping as low as $16,000.
Despite these setbacks, El Salvador has been consistently dollar-cost-averaging into Bitcoin since 2021, with an average buying price of $43,097 per BTC. With the current price of Bitcoin above $62,000, the country now has an unrealized profit of over $57.4 million on its Bitcoin holdings. This potential windfall could be a lifeline for El Salvador, as venture capitalist Tim Draper suggests that the nation could become financially independent and repay its loans to the International Monetary Fund if Bitcoin reaches $100,000.
Many crypto analysts predict that Bitcoin will surpass the $100,000 mark during the 2024 to 2025 bull cycle. According to a research report by Bitfinex analysts, the price of Bitcoin could even reach a cycle top of above $150,000 following the 2024 halving. However, the future price action of Bitcoin will heavily depend on institutional inflows from US spot Bitcoin exchange-traded funds, which have recently turned positive after three consecutive weeks of net outflows. In the past week alone, US Bitcoin ETFs have amassed a total of $413 million in net inflows.
In summary, El Salvador’s proof-of-reserves website provides transparency and real-time data on the country’s Bitcoin holdings. Despite initial challenges, El Salvador’s Bitcoin strategy could potentially lead to financial independence and substantial profits if Bitcoin’s price continues to rise. The future price trajectory of Bitcoin will largely depend on institutional investments, particularly from US spot Bitcoin exchange-traded funds.