El Salvador’s Bold Bitcoin Experiment Shows Mixed Results

El Salvador’s pioneering move to adopt Bitcoin (BTC) as legal tender over two years ago has yet to yield significant returns, with the country’s crypto investments currently facing losses.

The Nayib Bukele Portfolio Tracker, a website tracking El Salvador’s Bitcoin investments, shows that the government’s Bitcoin holdings amount to 3,124 BTC, valued at approximately $118.3 million. This figure represents a 6.44% loss, equivalent to $8.1 million, from its initial investment.

The exact size of El Salvador’s Bitcoin portfolio remains unclear, as the bank handling the government’s Bitcoin funds has not disclosed specific details. Nonetheless, the website estimates the portfolio based on public tweets from the nation’s president, Nayib Bukele, who has been transparent about the quantities and purchase prices of these investments.

El Salvador’s initial Bitcoin acquisitions occurred around the time the cryptocurrency became legal tender, with the government purchasing 550 BTC at an average price of about $52,000 each. However, Bitcoin’s value dropped sharply shortly thereafter.

President Bukele continued to invest in Bitcoin, even during declining market phases. Notably, between October and November 2021, he made two significant purchases of 520 BTC at roughly $59,000 each, in an attempt to “buy the dip.”

In a shift of strategy, since November 2022, following the significant drop in Bitcoin’s value post-FTX collapse, Bukele declared his intention to buy one Bitcoin daily. If he has adhered to this plan, El Salvador would have acquired an additional 374 BTC since then. With Bitcoin’s value increasing by 128% since the previous year, these recent purchases have partially offset the country’s earlier investment losses.

President Bukele, known for his unconventional approach, once claimed to have personally traded Bitcoin on behalf of the nation, sometimes under informal circumstances.

In comparison, the Bitcoin investments of MicroStrategy, as tracked by the saylortracker.com website, show more positive results. MicroStrategy’s verified holdings of 158,400 BTC, as per its financial reports, have generated profits of $1.28 billion, with the total value exceeding $6 billion.