Key Points
- El Salvador has launched a proof-of-reserve website to monitor its Bitcoin holdings.
- The nation currently holds 5,748 BTC, worth roughly $360 million.
El Salvador has introduced its own proof-of-reserve website. This platform offers a variety of tools for tracking the country’s Bitcoin (BTC) reserves using on-chain data.
Increasing Bitcoin Holdings
The country’s online Bitcoin Treasury provides real-time data on its BTC reserves. Currently, El Salvador holds 5,748 BTC, which is valued at about $360 million with Bitcoin trading above $62,700.
Over the past week, El Salvador purchased seven BTC worth more than $438,000. In the last 30 days, it added a total of 31 BTC worth $1.94 million. These acquisitions align with the nation’s objective of adding 1 Bitcoin to its treasury daily.
Bitcoin as Legal Tender
El Salvador made history by becoming the first country to accept Bitcoin as legal tender in September 2021. This move is aimed at promoting financial inclusion, facilitating more efficient remittance payments, and attracting more financial innovation.
The decision by President Nayib Bukele was met with widespread criticism after Bitcoin dropped from its previous all-time high of $69,000 in November 2021 following the FTX exchange collapse. As a result, El Salvador’s Bitcoin holdings suffered significant losses when Bitcoin fell to as low as $16,000 during the bear market.
El Salvador has been dollar-cost-averaging into Bitcoin since 2021, with an average buying price of $43,097 per BTC. With BTC currently trading above $62,000, El Salvador has an unrealized profit of over $57.4 million on its Bitcoin holdings.
These Bitcoin holdings could potentially represent a significant financial lifeline for the nation. Venture capitalist Tim Draper suggested that the nation could soon become financially independent and pay off its loans to the International Monetary Fund if Bitcoin’s price reaches $100,000.
Several well-known crypto analysts have predicted that BTC will surpass the $100,000 mark during the 2024-2025 bull cycle. Following the 2024 halving, Bitcoin could see a cycle top of above $150,000.
Bitcoin’s price action will primarily depend on the institutional inflows from U.S. spot Bitcoin exchange-traded funds (ETFs), which turned positive after three consecutive weeks of net outflows. The U.S. Bitcoin ETFs collected a total of $413 million worth of net inflows last week.
