Published
2 months ago on
February 29, 2024
Table of Contents
- El Salvador’s BTC Triumph
- Accumulation of Bitcoin Reserves
- Profit Margins Amid Price Surge
- Parallel Strategy: MicroStrategy’s Success
El Salvador will be HODLing its Bitcoin reserve for the foreseeable future as President Nayib Bukele claims there are no plans to sell.
El Salvador’s BTC Triumph
El Salvador’s total holdings in Bitcoin have exceeded $60 million amid the cryptocurrency price surge. However, President Bukele is in no rush to cash them in.
In an update posted on X.com, the president claimed that the country has the BTC reserves to reap a profit of almost $41.6 million, representing a 40% return on investment.
He wrote,
"When Bitcoin's market price was low, they wrote literally thousands of articles about our supposed losses. Now that Bitcoin’s market price is way up if we were to sell, we would make a profit of over 40%."
Accumulation of Bitcoin Reserves
The country started its Bitcoin journey in 2021 when it officially recognized the crypto as legal tender. It also started building up its BTC reserves with an initial purchase of just 700 BTCs. However, the move faced skepticism and criticism from various quarters, including media figures questioning the profitability of such a venture. Furthermore, the multiple blows to the crypto industry in 2022, like the FTX ecosystem crash, also contributed to speculation regarding El Salvador’s financial stability.
Despite the global backlash, the nation persisted, and over the past two years, it has amassed over 2800 BTCs.
Profit Margins Amid Price Surge
The recent surge in Bitcoin's price, attributed in part to the launch of several spot Bitcoin ETFs in January, has seen its value exceed $60,000. El Salvador finds itself in a lucrative position with a price increase of over 8% in the last 24 hours and a significant 18% rise over the past week. Each BTC in its holdings was acquired at an average cost of $42,440, presenting a substantial unrealized profit margin of up to $40 million.
Parallel Strategy: MicroStrategy’s Success
El Salvador isn't alone in reaping the rewards from its Bitcoin strategy. MicroStrategy, led by Michael Saylor, has also embraced Bitcoin as part of its portfolio. Holding 193,000 Bitcoin valued at over $11.7 billion at current market prices, MicroStrategy's Bitcoin acquisition at $6.09 billion has yielded a remarkable profit of around $5.7 billion.
Despite the tempting profits, both El Salvador and MicroStrategy remain committed to holding onto their Bitcoin reserves. President Bukele's affirmation echoes sentiments shared by MicroStrategy, with neither entity expressing intentions to sell their holdings, even as Bitcoin's price eyes a potential new all-time high.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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