El Salvador one of the smallest and most densely populated countries in Central America may eventually become one of the wealthiest countries in the world because of its Bitcoin holdings.

For context, the country became the world’s first nation to accept Bitcoin as legal tender in September 2021. Then, on November 16, 2022, El Salvador’s President Nayib Bukele announced that the government would start purchasing 1 BTC per day.
Although President Bukele’s decision was met with criticism, it has been reported that the Bitcoin held by the government of El Salvador which consists of over 2,000 BTC – is now valued at more than $150 million.

While impressive, President Bukele has also stated that he has no plans to sell the country’s vast Bitcoin holdings. As the Bitcoin halving event approaches, El Salvador could see even more gains if the price of BTC continues to increase.

El Salvador Could Become one of the Wealthiest Countries

Given this, industry experts are predicting that El Salvador may eventually become one of the wealthiest countries in the world.
Silicon Valley-based Venture Capitalist Tim Draper recently stated on the Web3 Deep Dive podcast that El Salvador is taking off as an innovative country, noting that the region may soon be one of the most attractive places in the world to live.

“Within maybe 30 or 40 years, El Salvador will have gone from the poorest, most crime ridden country, to maybe one of the richest, most innovative countries in the world, just in that period of time,” said Draper. “And this is just because they embraced Bitcoin.”

Draper further pointed out that if Bitcoin reaches $100,000 El Salvador may be able to pay off loans owed to the International Monetary Fund (IMF).
Echoing this, Alexander Mamasidikov, Founder and CEO of CrossFi a platform focused on bridging traditional banking with blockchain told Cryptonews that he believes El Salvador will soon be financially independent.

“This will allow the country to focus entirely on its internal tasks, which is most important in our modern world,” said Mamasidikov. “Recognizing Bitcoin as an official currency has allowed the government to completely change the financial model and go its own way.”

Bitcoin Enables Financial Inclusivity for Salvadorans

Indeed, Bitcoin is already proving to be an important asset class for El Salvador.
Joe Nakamoto – a crypto journalist who recently filmed a Bitcoin-focused documentary in El Salvador – told Cryptonews that Bitcoin has introduced financial inclusivity and sovereignty to the region.
“In a country where a large portion of the population does not have access to traditional banking services and many families depend on remittances, BTC allows Salvadorans to become their own bank and receive money from anywhere in the world for an incredibly low fee,” said Nakamoto.

El Salvador Sets Example For Other Countries

Regardless of what President Bukele eventually plans to do with the Government’s Bitcoin, El Salvador has started to set a positive example for other countries planning to incorporate the digital asset.
For instance, El Salvador’s long-anticipated Bitcoin bonds, also known as “Volcano Bonds,” have reportedly received regulatory approval for a launch this year. Once approved, El Salvador will be the first country in the world to leverage Bitcoin bonds.

“Personally, I see the adoption of Bitcoin in El Salvador as a step towards financial freedom while Bitcoin advocates globally can now well and truly point to El Salvador as a success story,” said Mamasidikov.
Yet although the efforts made by President Bukele have been impressive, Nakamoto pointed out that many of the country’s citizens still lack basic understanding of Bitcoin concepts.

“I interviewed over 30 Salvadorans on the streets of San Salvador to ask them if they had used Bitcoin as part of the documentary I filmed in 2022,” he said. “The vast majority had used Bitcoin at some point in the past 3 months.

However, when it came to basic concepts about Bitcoin such as what is the total number of Bitcoins, most struggled.”
Given this, Nakamoto shared that he plans to travel back to El Salvador this year to further investigate Bitcoin adoption.
“I hope to repeat my questioning to understand if the country has a deeper understanding of Bitcoin and money,” he said. “Bitcoin as a technology and money is a paradigm shift, and as such, it requires time, effort, and a willingness to learn and understand.”