El Salvador, the first country to adopt Bitcoin as legal tender, now holds over $340 million worth of Bitcoin, according to Arkham Intelligence. The country's steady accumulation reflects its ongoing commitment to cryptocurrency, despite international skepticism and market fluctuations.
Accumulation Strategy
Since March 2024, El Salvador has been purchasing approximately one bitcoin daily, bringing its total reserves to 5,856 bitcoins, currently valued at $344 million. This consistent strategy showcases the nation’s aggressive pro-Bitcoin stance under President Nayib Bukele.
International Concerns
The International Monetary Fund (IMF) has expressed concerns about El Salvador's Bitcoin endeavors, urging greater transparency and highlighting potential fiscal risks. Despite these warnings, the country continues its Bitcoin accumulation, even proposing a tax-free "Bitcoin City."
Limited Adoption for Remittances
Despite Bitcoin's legal status, its adoption for remittances—a crucial financial lifeline for many Salvadorans—remains limited. Only 1.3% of remittances last year were conducted using Bitcoin, with high transaction fees discouraging broader use in a nation highly dependent on remittances.
Conclusion
El Salvador’s growing Bitcoin reserves highlight its unwavering commitment to cryptocurrency, even as international bodies like the IMF raise concerns. While the long-term impacts of this strategy remain uncertain, the country's bold approach continues to draw global attention.
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