San Salvador, El Salvador – As bitcoin reaches historic highs, surpassing $100,000 for the first time, El Salvador’s President Nayib Bukele is triumphant about his big bet on the cryptocurrency. The adoption of bitcoin, which has been legal tender in El Salvador since 2021, has not quite matched the president’s enthusiasm, but the value of the government’s reported investment now stands at more than $600 million.
Bitcoin’s value 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. However, by Thursday afternoon, bitcoin’s value had fallen back below $100,000, sitting just above $99,000.
Bukele blames the political opposition for causing many Salvadorans to miss out on the bonanza. He claims that the opposition’s protests against the government’s decision to make bitcoin legal tender in June 2021 prevented many people from signing up for digital wallets and taking advantage of the opportunity.
Not everyone is as optimistic about the government’s investment in bitcoin. El Salvador’s former Central Bank President Carlos Acevedo pointed out that the government’s investment is still unrealized, meaning it has not been sold and converted to traditional currency. He also warned about the persistent risk of volatility in the cryptocurrency market.
Despite this, Bukele remains upbeat, even receiving an impressive comment from Elon Musk on his Facebook post. Many Salvadorans, however, have not yet taken the plunge and invested in bitcoin. Esteban Escamilla, a worker in a clothing store in Santa Tecla, cashed out the original $30 of bitcoin offered in 2021, while Josefa Torres, a 45-year-old, never signed up for a digital wallet and instead used her original investment for household expenses.
The International Monetary Fund (IMF) has also expressed concerns about the potential risks associated with El Salvador’s bitcoin project, citing the need for further efforts to enhance transparency and mitigate fiscal and financial stability risks.