SAN SALVADOR, El Salvador (AP) — As bitcoin hit an all-time high and surpassed $100,000 for the first time, El Salvador’s President Nayib Bukele triumphed Thursday over his big bet on the cryptocurrency.
The adoption of bitcoin – which has been legal tender in the Central American country since 2021 – has never quite matched the president’s enthusiasm, but the value of the government’s reported investment now exceeds $600 million.
Bitcoin has rebounded strongly since Donald Trump’s election victory last month, crossing the $100,000 mark on Wednesday evening, just hours after the president-elect said he plans to appoint cryptocurrency advocate Paul Atkins as the next chairman of the Securities and Exchange Commission.
Just two years ago, Bitcoin’s volatile value fell below $17,000. Bitcoin fell below $100,000 on Thursday afternoon and sat just above $99,000 at 3:00 PM ET
Bukele on Thursday accused his embattled political opposition of causing many Salvadorans to miss the bonanza.
There were street protests when Congress made bitcoin legal tender in June 2021, although that move was not the only motivation for the protesters.
The small Central American country has long used the dollar as a means of payment, but Bukele promised that bitcoin would provide new opportunities for El Salvador’s unbanked and that he would no longer be able to use money transfer services for the remittances sent home by Salvadorans abroad to steer. The government offered $30 worth of bitcoin to those who signed up for digital wallets.
Many did so, but quickly cashed out of the cryptocurrency.
“It is important to emphasize that not only did the opposition make widespread mistakes on bitcoin, but this time, unlike on other issues (where they were also wrong), this time many were affected,” Bukele wrote on Facebook.
Bukele drew an “impressive” comment from Elon Musk on the social media platform X on Thursday.
The former president of El Salvador’s central bank, Carlos Acevedo, pointed out on Thursday that while there are profits, these unrealized profits will remain until the government’s bitcoin is sold. That said, he said Bukele’s government was doing well with the bitcoin movement, especially in light of Trump’s election.
Acevedo said that “the markets’ optimism that a Trump administration will be friendly to the markets and especially to Bitcoin” explained the continued rally over the past month.
But cryptocurrency volatility was an ongoing risk, he said.
“The average Salvadoran does not use bitcoin, but there are obviously Salvadorans with economic resources who had invested in bitcoin even before that, but it is a small group,” Acevedo said.
Esteban Escamilla, a worker at a clothing store in Santa Tecla, outside the capital San Salvador, said he cashed in the original $30 worth of bitcoin offered in 2021.
“I don’t use bitcoin because I don’t have (money) to invest and speculate with, but I know it has gone up a lot,” he said, realizing he would have more money now if he had it in the wallet held. bitcoin.
Josefa Torres, 45, said while grocery shopping that she also didn’t have any bitcoin. “I took the money out and used it for household expenses,” she said.
At the end of meetings between the International Monetary Fund and the government of El Salvador in August, the IMF issued a statement citing the country’s bitcoin holdings.
“While many of the risks have not yet materialized, there is a collective recognition that further efforts are needed to increase transparency and mitigate the potential risks to the Bitcoin project’s budget and financial stability,” the IMF said.
