It’s 6 months since Bitcoin was officially adopted in El Salvador. If one could imagine that other countries would also take Bitcoin in stride, this is not the case at the moment. Either way, El Salvador is like an outdoor lab. Exactly, 6 months later, let’s return to the situation in El Salvador.
Bitcoin in El Salvador, summary
September 7, 2021 will remain a historic day for many economic analysts and crypto-supporters. Why ? This is the day where “Bitcoin Law” has been officially used in El Salvador. Since that date, Bitcoin has been the country’s official currency in the same way as the US dollar. To be precise, the law is from June 2021.
Since then, El Salvador has continued tobuy bitcoin. Like any good crypto investor, the country most often tried to buy Bitcoin when the price was falling. The most important bitcoin purchases made by El Salvador were:
- 400 BTC just before the adoption of the Bitcoin Act;
- 300 BTC shortly after the Bitcoin Act;
- 420 BTC in October 2021;
- 100 BTC in November 2021;
- 150 BTC in December 2021.
At present, it is estimated that El Salvador has 1,801 bitcoins in the coffers, which equates to more than $ 70 million (at current prices).
2022, an important year for Bitcoin in El Salvador
El Salvador intends to capitalize in 2022 on the economic briefings taken in 2021. From the beginning of the year, the country’s President Nayib Bukele thus issued the following wishes / predictions regarding Bitcoin:
- The construction of the world’s first Bitcoin city;
- A Bitcoin for $ 100,000;
- The success of “volcanic bonds”;
- A huge surprise at the Bitcoin conference in Miami (April 6-9, 2022);
- 2 countries will adopt Bitcoin as their official currency;
- Bitcoin will be a major topic in the US midterm elections.
Not surprisingly, El Salvador’s decision was heavily criticized by some economic institutions. Quite concretely in the United States, this decision was not well received. At the same time, how can we be surprised when Bitcoin comes to compete directly with the sacred altar of the US dollar?
Moreover, recently U.S. senators have called for a study of Bitcoin in El Salvador. These senators are concerned that El Salvador’s decision could encourage cartels and cybercrime. El Salvador’s president reacted immediately, insisting on reminding these senators that the country was sovereign in the matter. Yes El Salvador does not intend to be stepped on regarding Bitcoin in 2022!
Tourism up, double-digit GDP
In recent weeks, the country has communicated about two economic indicators attributing their good shape to Bitcoin. However, it is difficult to quantify exactly the share of Bitcoin in the dynamics of these two indicators.
Primarily, the tourism sector has increased 30% in the country. The increase in tourism was noticed in the months following the entry into force of the “Bitcoin Law”. The tourism sector plays an important role in the country’s economy. But with the global pandemic, tourism is a sector that has suffered enormously.
El Salvador’s government also has good reason to be excited to see tourism grow faster than expected. A large part of this increase is due tourists who came to understand the setup of the Bitcoin ecosystem. Of course, that also applies crypto investors.
At the same time, the country was happy to see its GDP growth like never before. Thereby, El Salvador’s GDP in 2021 rose 10.3%. Such double-digit growth had never been seen before!
Can we link the rise in tourism, Bitcoin and GDP growth? The dynamics of a GDP are multifactorial, so it would be wrong to blame Bitcoin for this good result. But according to El Salvador’s government, “economic tourism” has evolved a lot. Many companies have come to learn about El Salvador, both out of curiosity and strategic choices. This has led to further investments in the country.
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