El Salvador’s President Celebrates Bitcoin Surge as Holdings Reach

El Salvador’s leader Nayib Bukele proclaimed victory on Thursday after Bitcoin briefly topped $100,000, a level that lifted the government’s reported crypto holding to more than $600 million [1]. The president blamed political opponents for “missing out” on the rally, while officials noted the gain remains unrealized until the state actually sells any of its coins [1].

Key takeaways

• Bitcoin’s price hit a historic high above $100,000, prompting Bukele’s triumphant statement [1].
• The government’s Bitcoin portfolio, acquired since the 2021 legal‑tender law, is now valued at over $600 million, though the profit is still on paper [1].
• Opposition parties were criticized by Bukelle for allegedly preventing Salvadorans from benefiting from the surge [1].
• Most Salvadorans who received the $30 Bitcoin incentive in 2021 quickly sold it, missing the recent price spike [4].
• Former central‑bank head Carlos Acevedo said the gain is “unrealized” until the state liquidates its holdings [1].

Bitcoin’s rally and El Salvador’s legal‑tender experiment

El Salvador became the world’s first nation to adopt Bitcoin as legal tender in June 2021, a move championed by Bukele as a way to boost financial inclusion and reduce remittance costs [2]. The law required businesses to accept the cryptocurrency alongside the U.S. dollar, and the government distributed $30 worth of Bitcoin to citizens who opened digital wallets [4]. Many recipients promptly converted the tokens to cash, limiting the domestic impact of the policy [4].

The recent price surge came after a period of volatility that saw Bitcoin dip below $17,000 in 2021 and again fall under $20,000 in mid‑2022, prompting Bukele to buy additional coins at roughly $19,000 each [3]. Although the state’s average purchase price sits near $46,000 per Bitcoin, the current market value exceeds $99,000, creating a paper gain of roughly $600 million [1]. Finance Minister Alejandro Zelaya has stressed that the unrealized profit does not affect the national budget, which allocates less than 0.5% to the crypto fund [3].

Political fallout and public perception

Bukele’s celebration on social media singled out the opposition for “err[ing] resoundingly” on the Bitcoin issue, arguing that their resistance deprived many Salvadorans of the upside [1]. Critics, however, continue to warn that Bitcoin’s extreme price swings could jeopardize a country where a fifth of the population lives on under $5.50 a day [3]. Former central‑bank president Carlos Acevedo echoed this caution, noting that the gain remains hypothetical until the government decides to sell its holdings [1].

Why it matters

The episode underscores the high stakes of a sovereign Bitcoin strategy: while the price rally temporarily validates Bukele’s gamble, the lack of actual sales means the benefit is still theoretical. International observers, including the IMF, have previously urged El Salvador to reconsider its crypto‑fund structure due to volatility and crime concerns [3]. As the market fluctuates, the government’s next move—whether to liquidate, hold, or expand its Bitcoin position—will shape both fiscal outcomes and the political narrative surrounding the country’s bold experiment.