El Salvador’s Bitcoin Timing Proves Bukele’s Decision Right
El Salvador’s President Nayib Bukele has been making waves in the world of cryptocurrency by implementing a dollar-cost averaging strategy for bitcoin. While central banks are busy buying gold at record-setting speeds, El Salvador has chosen to focus on stacking sats, a term used to refer to accumulating small amounts of bitcoin.
In a strategic move, El Salvador began purchasing bitcoin regularly, particularly advantageous timing as it coincided with a significant dip in bitcoin’s value following FTX’s bankruptcy filing. Bukele’s decision to start buying bitcoin daily came after a tumultuous period for the cryptocurrency, with its value dropping by one-fifth amidst various market challenges.
El Salvador’s initial foray into bitcoin acquisitions began in September 2021, just days before bitcoin was officially recognized as legal tender in the country. While specific details of the initial purchases remain undisclosed, Bukele’s social media posts hint at significant investments made during that time.
Despite the lack of on-chain receipts for the first set of purchases, estimates suggest that El Salvador potentially spent over $100 million on its initial bitcoin acquisitions, with current valuations showing significant paper gains on those investments.
As El Salvador continued its bitcoin accumulation journey, Bukele consolidated the government’s bitcoin treasury into a single address earlier this year. The move revealed that the country had acquired more bitcoin than initially anticipated based on Bukele’s public statements.
Moreover, El Salvador’s proactive approach to bitcoin accumulation is evident in its ongoing daily purchases, with new bitcoin consistently being transferred to cold storage. Although the exact purchase prices remain undisclosed, the government’s commitment to acquiring bitcoin through dollar-cost averaging has proven to be a lucrative strategy, yielding significant returns on investment.
In conclusion, El Salvador’s strategic approach to bitcoin acquisition, coupled with timely market interventions, has positioned the country favorably in the cryptocurrency landscape. The government’s commitment to building its bitcoin portfolio through calculated investment strategies underscores its confidence in the long-term potential of digital assets.
The broader cryptocurrency market continues to experience fluctuations, with Bitcoin and Ethereum showing modest gains on the day while still down over the past week. Despite market volatility, El Salvador’s steadfast commitment to bitcoin accumulation serves as a testament to the country’s embrace of cryptocurrency as a viable financial asset.
