Bitcoin

On June 5, 2021, El Salvador caused a stir in the financial realm by publicly announcing its intention to establish Bitcoin as a recognized legal tender within its borders. Since that groundbreaking revelation, the North American nation has not only successfully implemented Bitcoin as a lawful form of currency but has also made significant investments in digital assets. Let&#39;s delve into how El Salvador has fared in the aftermath of this decision.Following the passing of the bill by President Nayib Bukele, officially recognizing Bitcoin as a legal tender in El Salvador, the country wasted no time in procuring substantial quantities of BTC. On September 6, 2021, a day before Bitcoin was formally accepted as legal tender, El Salvador purchased a total of 400 BTC at an average price of $46,811, amounting to $18.724 million.Undeterred by cautionary advice from financial institutions like the International Monetary Fund (IMF), President Bukele remained resolute in his commitment to investing the country&#39;s funds in cryptocurrencies. Just a day after the initial purchase, on September 7, El Salvador acquired 150 additional BTC for approximately $6.9 million. Since then, the country has continued purchasing BTC on a semi-regular basis, steadily accumulating a total of 2,381 BTC as of its most recent purchase on June 30, 2022. During this particular transaction, 80 BTC were obtained at an average price of $19,000, valued at $1.52 million at that time.However, El Salvador&#39;s dollar cost average (DCA) strategy has not been advantageous thus far. The country has spent a total of $103,233,360 on its BTC purchases since 2021, at an average price of $43,357. Presently, El Salvador&#39;s BTC holdings are worth approximately $61.3 million, indicating a significant loss of $40 million on its initial investment in Bitcoin.Since September, El Salvador has recognized BTC as a legal tender, allowing its residents to utilize cryptocurrency for the purchase of goods and services. However, the adoption of Bitcoin has not progressed as swiftly as initially anticipated, with the US dollar continuing to dominate as the primary currency within the country.Following the official announcement in 2021, reports emerged of protests against the utilization of BTC as a legal tender, citing concerns regarding the security and economic risks associated with a volatile digital asset serving as a recognized form of currency. To this day, these concerns persist in the minds of lawmakers.In May, US Senators James Risch, Bob Menendez, and Bill Cassidy introduced a bill, known as the Accountability for Cryptocurrency in El Salvador Act, which calls for El Salvador to provide reports on the adoption of BTC within its borders. The proposed assessment seeks to evaluate the potential risks posed to cybersecurity, economic stability, and democratic governance in El Salvador.As of now, President Bukele has yet to respond to this bill, which allows for a 90-day window for the plan to be submitted to the relevant congressional committees.Recently, on June 5, Reuters reported that El Salvador has entered into a public-private partnership aimed at investing $1 billion in the creation of an extensive Bitcoin mining farm. Volcano Energy, confirming this partnership, revealed that the country will initially allocate $250 million to the project, with the objective of establishing one of the largest BTC mining farms worldwide.

El Salvador’s Bitcoin Bill Is Now Two Years Old. How Has The Country Fared Since Then?

ItsBitcoinWorld

Andere artikelen gepubliceerd op 8 jun 2023

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