El Salvador’s President Celebrates Bitcoin Success

SAN SALVADOR, El Salvador (AP) — El Salvador’s President Nayib Bukele is feeling victorious as bitcoin reaches an impressive milestone, exceeding $100,000 for the first time. The cryptocurrency has been legal tender in this Central American nation since 2021, although its adoption has not fully captured the excitement Bukele initially expressed. Nevertheless, the government's investment in bitcoin now exceeds $600 million.

Bitcoin's price surge has been notable, particularly following the recent election victory of Donald Trump, which many attribute to increased market confidence. Just hours after Trump announced his intention to appoint cryptocurrency proponent Paul Atkins as the next chair of the Securities and Exchange Commission, bitcoin surpassed the $100,000 threshold.

In contrast, just two years earlier, the cryptocurrency had plummeted to below $17,000. However, by Thursday afternoon, its value dipped slightly to about $99,000.

Bukele has pointed fingers at his political opponents, claiming that their negativity has caused many Salvadorans to miss out on the financial benefits of bitcoin’s rise. Following the legal implementation of bitcoin in June 2021, the country experienced protests, which were fueled by various factors associated with the economic decision.

Before Bukele's leadership, El Salvador primarily used the U.S. dollar, but he argued that adopting bitcoin would provide more opportunities, particularly for the unbanked population and by reducing fees on remittance services for citizens living abroad. The government incentivized the use of bitcoin by offering $30 worth of the cryptocurrency to citizens who registered for digital wallets. However, many chose to cash out immediately.

“It’s crucial to highlight that the opposition was deeply mistaken about bitcoin’s potential, and their stance ultimately harmed many Salvadorans,” Bukele expressed on his Facebook page.

Elon Musk provided a supportive comment regarding Bukele's approach on social media, reflecting some level of endorsement from the tech community.

Former Central Bank President Carlos Acevedo noted that while there has been a gain in bitcoin's investments, it remains unrealized until the government decides to sell its holdings. Acevedo commended the administration for its strategy, especially in light of Trump’s election, which has inspired market optimism about favorable conditions for cryptocurrencies.

Despite the apparent success, he warned that bitcoin's volatility remains a significant risk. Acevedo remarked, “The average Salvadoran does not utilize bitcoin, but there are affluent individuals in the country who have prior investments; however, that represents a small segment of the population.”

Esteban Escamilla, a clothing store worker in Santa Tecla, shared that he had cashed out his initial $30 in bitcoin back in 2021. “I don’t engage with bitcoin since I lack the funds to invest, but I recognize its substantial increase in value,” he said, admitting he would have been better off if he had retained the cryptocurrency.

Josefa Torres, while shopping for groceries, mentioned she also withdrew her $30 and utilized it for daily expenses, indicating a common practice among locals.

Following an August meeting between the International Monetary Fund (IMF) and the Salvadoran government, the IMF issued a statement acknowledging the country's bitcoin investments. They emphasized that while risks have not yet fully manifested, there is a collective understanding that more steps should be taken to improve transparency and manage any potential financial risks associated with the Bitcoin project.

Bitcoin, ElSalvador, Bukele