El Salvador President Celebrates Success of Bitcoin Bet

El Salvador’s President Nayib Bukele is feeling pretty good right now. Why? Well, because his bet on bitcoin paid off big time! Bitcoin recently hit a historic high, climbing over US$100,000 for the first time ever. Bukele has been a big supporter of bitcoin, making it legal tender in El Salvador back in 2021. And guess what? The government’s investment in bitcoin is now valued at over US$600 million. Not too shabby, right?

Just a couple of years ago, bitcoin’s value was below US$17,000, so this recent surge is pretty impressive. Bukele is giving credit where it’s due, but he’s also pointing fingers at his political opponents for trying to rain on his parade. When the Congress made bitcoin legal tender, there were protests in the streets. Some people weren’t too thrilled about the idea, but Bukele saw it as an opportunity to provide new financial options for the unbanked in El Salvador and to cut out expensive money transfer services.

Even though many Salvadorans signed up for digital wallets and received US$30 in bitcoin from the government, a lot of them quickly cashed out. Hey, can’t blame them for wanting to secure some quick cash! But overall, the government’s bitcoin holdings are still a bit up in the air until they decide to sell.

Former Central Bank President Carlos Acevedo thinks Bukele deserves some props for making the move into bitcoin, especially given the recent political climate. There’s some optimism in the markets about how the new administration will handle things like bitcoin. But let’s not forget, cryptocurrency can be pretty volatile, so there’s definitely some risk involved.

For the average Salvadoran, bitcoin might still feel like a bit of a mystery. Esteban Escamilla, who works at a clothing store, cashed out his bitcoin offer from the government in 2021. He doesn’t have the extra money to invest in speculative ventures like bitcoin. And Josefa Torres, who was out grocery shopping, used her bitcoin money for household expenses. Real life has a funny way of taking priority over investments sometimes.

As the International Monetary Fund pointed out in a statement after meetings with El Salvador’s government, there’s still work to be done to address potential risks and enhance transparency related to the country’s bitcoin project. So, while bitcoin may be on the rise, there are still some hurdles to clear before it becomes a mainstream part of everyday life for Salvadorans.