El Salvador says it's sitting on an $84 million profit after bitcoin's record-breaking run

By Barbara Kollmeyer

One of the few countries to adopt bitcoin as legal tender has apparently seen an $84 million profit from bitcoin, boosted by the cryptocurrency's recent rally.

Nayib Bukele, president of El Salvador, re-posted a chart on X - formerly known as Twitter - late Monday that showed how much the country has profited from its bitcoin investment that began in 2021:

The post, based on a website tracking the amount of bitcoin owned by the country - the Nayib Bukele BTC portfolio - shows the country owns more than $204 million worth and has seen a profit of $84,593,453 to date - a return of more than 69%.

Bukele himself has said the country is going to keep holding on to its bitcoin, despite the hefty profit. "We won't sell, of course; at the end 1 BTC = 1BTC (this was true when the market price was low and it's true now)..." he said in a late February post.

During November 2022 lows, when bitcoin (BTCUSD) was trading around $16,000, Bukele said the country would start buying one bitcoin a day.

Bitcoin was last changing hands on Tuesday at just under $72,000, in a rally that began in February. The rally was fueled by U.S. approval of exchange-traded funds based on spot bitcoin and optimism ahead of the so-called halving event that has been bullish in the past for the crypto, which is up 72% so far this year.

The crypto climbed above $70,000 on Monday for the first time, after a top U.K. financial regulator said professional investors would be allowed to trade exchange-traded notes linked to the crypto.

In mid-2021, El Salvador made bitcoin legal tender, and at the same time launched Chivo Wallet, a government-designed digital wallet app that lets users make payments in dollars or bitcoin. At the time, the crypto was trading around $36,000.

But research published in the journal Science in December 2023 found that bitcoin had not seen wide adoption in El Salvador since its adoption, and that "digital payments were scarce and concentrated."

The article, written by University of Chicago economics professor Fernando Alvarez and Yale School of Management professors David Argente and Diana Van Patten, found that Salvadorans prefer cash, and their fears over transparency and privacy had impeded bitcoin adoption.

Transactions of bitcoin, they found, peaked at the time of adoption and trailed off thereafter. The trio carried out a survey with CID Gallup of 1,800 households in the country and followed up by analyzing blockchain data. A follow-up Yale Insights article earlier this year, noted that most of El Salvador's bitcoin progress comes from Bukele's social-media posts.

MarketWatch has reached out to the government of El Salvador for comment.

Read: Trump speaks favorably about bitcoin as cryptocurrency blasts through fresh level

Check out On Watch by MarketWatch, a weekly podcast about the financial news we're all watching - and how that's affecting the economy and your wallet. MarketWatch's Jeremy Owens trains his eye on what's driving markets and offers insights that will help you make more informed money decisions. Subscribe on Spotify and Apple.

-Barbara Kollmeyer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-12-24 0932ET

Copyright (c) 2024 Dow Jones & Company, Inc.