El Salvador and Bitcoin

 Relying solely on Bukele’s frequent Twitter announcements that he bought Bitcoin, the Salvadoran president has bought 1,391 Bitcoin. 

Those purchases—according to Bloomberg—cost approximately $71 million based on an average price of $51,056 per Bitcoin. 

Assuming the government is still holding all of this Bitcoin, the total sum acquired is now worth roughly $59 million by today’s prices. Of course, these losses are merely on paper if Bukele hasn't sold any of the Bitcoin.

This means that Bukele’s Bitcoin purchases have cost El Salvador about $12 million in public funds. Right after I hopped out the back of a pickup in El Zonte, El Salvador, I recognized I wasn’t in an ordinary beach town.

El Zonte’s welcome sign had two Bitcoin logos, its cafes offered 75% discounts if you pay in Bitcoin, and its trash cans sported the Bitcoin emblem. I’d been hitchhiking my way through the country’s west coast, enjoying its world-class surf conditions last month, and wasn’t looking for its Bitcoin epicenter. But somehow, I’d stumbled right into it.

When El Salvador made Bitcoin legal tender last September, many — myself included — reacted skeptically. Nayib Bukele, El Salvador’s president, seemed to be YOLOing away the country’s treasury like a Reddit-addicted crypto trader.

Bukele has repeatedly bought millions of dollars worth of Bitcoin, complains when he “missed the f***ing bottom by 7 minutes,” and as Bitcoin’s price has tanked in 2022, it has appeared to cost his country dearly. It looks to many like a mess.

But the reality on the ground, I found, is more complicated than the narrative. There’s a good chance El Salvador’s Bitcoin experiment will work out, at least in some ways.