SAN SALVADOR, El Salvador (AP) — As bitcoin reached historic highs, surpassing $100,000 for the first time, El Salvador’s President Nayib Bukele was triumphant on Thursday about his big bet on the cryptocurrency. The adoption of bitcoin, which has been legal tender in the Central American nation since 2021, never quite matched the president’s enthusiasm, but the value of the government’s reported investment now stands at more than $600 million.
Bitcoin has rallied mightily since Donald Trump’s election victory last month, exceeding the $100,000 mark on Wednesday night, just hours after the president-elect said he intends to nominate cryptocurrency advocate Paul Atkins to be the next chair of the Securities and Exchange Commission.
Bukele blamed his beleaguered political opposition for causing many Salvadorans to miss out on the bonanza. The government offered $30 in bitcoin to those who signed up for digital wallets, but many quickly cashed out the cryptocurrency.
El Salvador’s former Central Bank President Carlos Acevedo pointed out that while there has been a gain, it remains an unrealized one until the government’s bitcoin is sold. He credited Bukele’s administration with doing well on the bitcoin move, especially in light of Trump’s election.
However, the cryptocurrency’s volatility was a persistent risk, and many Salvadorans, including workers and ordinary citizens, did not invest in bitcoin. Instead, they cashed out the initial $30 offer or used it for household expenses.
The International Monetary Fund issued a statement after meetings with El Salvador’s government in August, mentioning the country’s bitcoin holdings and the need for further efforts to enhance transparency and mitigate potential fiscal and financial stability risks from the Bitcoin project.