Bitcoin reached a new all-time high of $106,600 early this morning, continuing its record-breaking rally that has lasted for seven consecutive weeks since the election of U.S. Republican presidential candidate Trump. 10x Research predicts that the Bit coin price could reach $120,000 before Trump's inauguration in January.
El Salvador President Shares Portfolio
As Bit coin hit a new high, El Salvador President Nayib Bukele tweeted a screenshot of the country's Bit coin investment portfolio today. The image shows that El Salvador's Bit coin holdings are worth $632.6 million, with a total investment of $270.4 million and unrealized gains of $362.2 million, a return on investment of 133.95%.
Under Bukele's active promotion, El Salvador officially adopted Bit coin as legal tender in September 2021 and has been actively pushing various Bit coin policies, including daily Bit coin purchases of 1 Bit. According to data platform Arkham, El Salvador currently holds 5,966 Bit coins, worth $624 million.
However, despite being the first country to adopt Bit coin as legal tender, the Salvadoran people have generally not held Bit coin long-term. The Associated Press previously reported that while the Bukele government provided $30 in Bit coin to those who registered the country's digital wallet, many quickly converted the Bit coin to cash.
Regarding this, Bukele recently criticized the opposition, saying:
The important thing to emphasize is that the opposition not only made a serious mistake on Bit coin, but unlike other issues, this time their opposition affected many people.
Former Central Bank of El Salvador President Carlos Acevedo stated that while the Bit coin holdings have generated gains, these are still unrealized gains before the government sells the Bit coin. In the context of Trump's election, he expressed appreciation for Bukele's embrace of Bit coin:
The market's optimism about the Trump administration being favorable to the market, especially Bit coin, explains the continued rise of Bit coin over the past month, but the volatility of cryptocurrencies remains a persistent risk.
The general Salvadoran population does not use Bit coin, but there are obviously some Salvadorans with economic resources who had even invested in Bit coin before, but they are a minority.
Plans to Eliminate Mandatory Bit coin Acceptance
It is worth noting that the Salvadoran government had previously sought to negotiate a credit line with the IMF to solve its fiscal problems, but the IMF demanded that El Salvador amend its Bit coin law, citing the legal status of Bit coin as the main obstacle to the country receiving credit support, leading to a two-year deadlock in negotiations.
Recently, the Financial Times reported that El Salvador is negotiating with the IMF to take a step back and eliminate the legal requirement for businesses to accept Bit coin as a payment method, allowing companies to decide whether to accept Bit coin payments, in exchange for a $1.3 billion loan from the IMF.
