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El Salvador displays strong reserves of bitcoins

Sun 19 May 2024 ▪ 3 min of reading ▪ by Nicolas T.
Getting informed Mining

El Salvador is the only country besides Bhutan having the good idea to mine bitcoins. Its harvest now reaches nearly 500 BTC.

bitcoin

Bitcoin, the currency of El Salvador

El Salvador has mined 474 bitcoins since 2021. And that, without coal or gas. The energy comes from a geothermal power plant fueled by the imposing Tecapa volcano.

Of the 102 megawatts (MW) produced by the public power plant, 1.5 MW are dedicated to power its small mining setup (300 miners).

The government holds the equivalent of 354 million dollars in BTC. The small Central American nation can now boast of having 5,750 BTC. They have been transferred into a cold wallet itself stored in a safe located on national territory.

El Salvador buys one bitcoin per day since 2022 and President Nayib Bukele has recently reaffirmed that these purchases will continue until bitcoin “becomes unaffordable”.

The country obtains its bitcoins through daily purchases, mining, but also through the sale of passports and other government services. The country has considerably increased its bitcoin holdings which were estimated at less than 3,000 BTC a few months ago.

El Salvador’s attraction to bitcoin dates back to September 2021, when it officially made it legal tender. And despite the drop in bitcoin, the criticisms, and the pressures from the International Monetary Fund, the Bitcoin strategy has remained unwavering.

Bhutan also uses its surplus hydropower to mine. More recently, the Ethiopian government rolled out the red carpet for miners. Texas is also not left behind with a close collaboration between miners, authorities, and the local power grid.

All nations having excess green electricity would do well to imitate the Salvadorian strategy. Unfortunately, many governments still see bitcoin as a threat. Let’s hope that the endorsement by BlackRock through the launch of its ETF in January will eliminate this anathema once and for all.

In the same vein, all multinationals should also imitate Microstrategy’s strategy. The Japanese firm Metaplanet has just done so by publishing entirely rational reasons for holding its treasury in bitcoins.

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Nicolas T. avatar
Nicolas T.

Bitcoin, geopolitical, economic and energy journalist.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.