El Salvador, the small Central American nation that made history just over a year ago when it made Bitcoin (BTC) legal tender, recently marked its first year of BTC adoption.
The Salvadoran government touted BTC as a tool to attract foreign investment, create new jobs and cut reliance on the United States dollar in the country’s economy at the time of adoption. Many BTC proponents and the libertarian community rallied behind the small nation despite mounting pressure from global organizations such as the World Bank and International Monetary Fund (IMF) to remove BTC as a legal tender.
A lot has changed over the past year since El Salvador became the first “Bitcoin nation.” Enthusiasm and public interest rose immediately after the recognition of BTC, with the price surging to new highs.
Salvadoran President Nayib Bukele joined the growing league of Bitcoin proponents to buy several market dips and even reaped the benefits of their BTC purchase in the early days as the country built schools and hospitals with its profits.
As market conditions turned bearish, however, the frequency of BTC purchases slowed down, and the president, who was often seen interacting with the crypto community on Twitter and sharing future Bitcoin endeavors, cut back his social media interactions significantly.
El Salvador has purchased 2,301 BTC since last September for about $103.9 million. That Bitcoin is presently worth roughly $45 million. The most recent purchase was made in mid-2022 when the nation bought 80 BTC at $19,000 a piece.
As the price of BTC tanked, critics who have long been raising concerns about a crypto bubble felt validated, with several comments along the lines of “I told you so.” However, market experts believe El Salvador’s BTC experiment is far from a failure.
El Salvador’s Bitcoin Volcanic bond, a project meant to raise $1 billion from investors to build a Bitcoin city, has already been delayed on numerous occasions now and skepticism is growing not just around the project but on the overall BTC adoption itself.