Key Points
- ARK Invest’s Cathie Wood believes that El Salvador’s Bitcoin and AI adoption could trigger a tenfold increase in the country’s GDP.
- She called the nation an “oasis” for BTC and AI.
ARK Invest’s CEO Cathie Wood believes that El Salvador could see its gross domestic product (GDP) increase by ten times over the next five years if the nation remains under the Bitcoin and AI adoption plan under Nayib Bukele’s presidency.
In a post on X from May 28, Wood said that President’s Bukele determination to turn the nation into an oasis for the Bitcoin and AI communities, which are two of the biggest economic and technology revolutions in history, might become the reason for a tenfold increase in the nation’s GDP.
President Bukele’s determination to turn El Salvador into an oasis for the bitcoin and AI communities – two of the biggest economic and technology revolutions in history – is the reason I believe that its real GDP could scale 10-fold during the next five years.
— Cathie Wood (@CathieDWood) May 28, 2024
President Bukele recently met with Wood and US economist Art Laffer to address investment opportunities in El Salvador. Bitcoin’s adoption into capital markets, AI, and tax policies were the major subjects addressed during the meeting.
Bitcoin advocate Stacy Herbert, and ARK Invest research associate Marc Seal were also present.
Wood shared via her X account that El Salvador’s GDP is at a low base of about $30 billion and the average income is only $450 per month.
She continued and said that President Bukele clearly understands the Laffer Curve and Art Laffer can see many ways to build on the momentum his tax incentives have put in place.
As Investopedia notes, the Laffer Curve is a tax theory suggesting an inverted U-shaped relationship between tax rates and the amount of tax revenue collected by governments. The ideal, or optimal, rate of taxation for an economy is the one that falls right at the top of the inverted U.
World Bank data reveals that the country’s GDP was $32.4 billion back in 2022, up by over 30% since Bukele first took office back in June 2019.
If this reached $300 billion, it would place the country’s GDP on par with Romania, the Czech Republic, and Chile as well.
Introducing ARK Educate’s curriculum on tech innovation
Wood also said that the President of El Salvador leaped at the idea of introducing ARK Educate’s curriculum on technologically enabled innovation to the schools in the country. These involve robotics, energy storage, AI, blockchain, and multiomics.
Since 2020, the company’s educators have made ARK’s research age-appropriate, according to Wood.
She also said that during the conversation, President Bukele turned out to be extremely knowledgeable, highly engaging, and vision-driven. Wood highlighted that she can understand the reasons why he is extremely popular not only in his country but throughout Latin America, Spain, and Portugal as well.
In our conversation, I found President Bukele incredibly knowledgeable, highly engaging, and vision driven. I can understand why he is extremely popular not only in El Salvador but throughout Latin America, Spain, and Portugal. Watch this leader and his country!
— Cathie Wood (@CathieDWood) May 28, 2024
El Salvador, the first nation to make Bitcoin legal tender
Since Bukele became president, El Salvador became the first nation to make Bitcoin legal tender, eliminated taxes related to tech innovations, and removed income tax for foreign investments and remittances back in March.
In April 2024, Google officially expanded into the country with a $500 million partnership.
El Salvador now holds 5,764 BTC in its treasury worth over $390.2 million at today’s prices.
The country recently launched its own proof-of-reserve website. It features tools that monitor the country’s Bitcoin holdings using on-chain data. The online Bitcoin Treasury offers real-time data regarding the Bitcoin reserves.
El Salvador was recently in the spotlight again due to their innovative Bitcoin-mining ways. The country used a volcano-fueled geothermal power plant at Tecapa Volcano.
The geothermal power plants generate 102 megawatts of electricity, of which 1.5 megawatts are used for the process of Bitcoin mining.
The innovative use of geothermal energy for Bitcoin mining is an important development in the crypto industry and it proves the potential for renewable energy sources in crypto mining.
