El Salvador’s Massive 5,800 Bitcoin Daily Accumulation Explained

The country is all set to make waves in the Crypto sector as it is going bold in accumulating Bitcoin. After adopting Bitcoin as legal tender in September 2021, the Nayib Bukele’s government has vowed to buy one Bitcoin per day for the last 665 days whether it is costly or cheap. This strategic plan has now accumulated a total number of 5,871 Bitcoins pushing the country’s reserve up to an amount equivalent to $342 million.

Daily Bitcoin Stacking: An Unbroken Dedication

El Salvador’s government led by President Bukele has been procuring one Bitcoin daily as a part of its investment. This unrelenting efforts to build the countries cryptocurrency reserves has not gone unnoticed by the international crypto community. Out of the 5,871 BTC owned by the government,  3,046 BTC has been publicly disclosed to have been purchased at an average price $43,888 per BTC. This consistent accumulation means that even during these periods of market downturn, El Salvador has been firmly committed to the possibility of Bitcoin.

Why Bitcoin? El Salvador’s Vision

The struggles of El Salvador with Bitcoin started when the country made history by becoming the first country in the world to make BTC legal tender. This action was designed to increase the usage of dollar in financial transactions more so because 70% Salvadorans do not access formal financial institutions. The country has long relied heavily on remittances, and Bitcoin was viewed as a means to wean people off of such an important source of financial support.

While the implementation of Bitcoin has not been a smooth ride in El Salvador, with only 12% of the population owning a BTC, Bukele’s administration believes that the long run’s gains are worth the challenges. The government continues to accumulate Bitcoins on an everyday basis in order to establish its confidence in the value of Bitcoin.

Challenges of Bitcoin Adoption

However, the population of Salvador has not actively embraced Bitcoin as enthusiastically as the government has. Another study done by the University Institute for Public Opinion revealed that there is still a market out there that has not adopted crypto yet. This lack of adoption could be attributed to several factors such as poor knowledge of how cryptocurrencies operate, and the fluctuating nature of Bitcoin prices.

However, despite all these, the President of the country, Nayib Bukele has not lost hope. He has also agreed with the fact that despite the failure of Bitcoin to become adopted by the common populace in El Salvador those who use it will have benefitted. The government still supports Bitcoin as a means of empowering the people economically especially those who are not privileged to join the mainstream banking sector.

International Scrutiny and Support

It is noteworthy that El Salvador has attracted the interest of international institutions because of this Bitcoin strategy. The International Monetary Fund commonly known as IMF has raised credibility concerns given some of the impacts arising from the investment in Bitcoin being a risky financial option for the country. Nevertheless, in August, 2023 the IMF approved potential basics of a loan agreement with El Salvador, this move can be considered as a sign of the IMF’s supportive disposition towards the country’s economic policies.

This move indicates that although the International organizations might have some concerns over the possible risks of cryptocurrency, they are ready to move forward with El Salvador as it is still stabilizing its financial future with the help of Bitcoin.

Long-Term Bitcoin Strategy

The accumulation of Bitcoins has been continual in El Salvador which is a major indication of the country’s long-term plan. This purchase of Bitcoins by the government on a daily basis and regardless of the daily fluctuations in prices show that there is a fundamental belief about the future of Bitcoins. With constant accumulation of Bitcoin, El Salvador is staking that Bitcoin has a promising future within the monetary technique of the world.

Future of Bitcoin in El Salvador

For now, with El Salvador still on its Bitcoin journey, the country’s audacious approach will probably remain a point of conversation in the international finance industry. While the road ahead may be uncertain, one thing is clear: This El Salvador revolution will not back down and it is up to time if this is going to be an investment worthy for El Salvador.

Read Also: Bitcoin’s September Struggles: Get Ready for ‘UPtober’