El Salvador's President celebrated as bitcoin reached a historic high, exceeding $100,000 for the first time. The country had adopted bitcoin as legal tender in 2021, with the government's reported investment now valued at over $600 million.
Bitcoin's surge in value coincided with the announcement of a cryptocurrency advocate being nominated as the next chair of the Securities and Exchange Commission. Just two years ago, bitcoin's value had dropped below $17,000, but it rallied to surpass $100,000 on Wednesday.
Despite the president's enthusiasm, there were protests when bitcoin was made legal tender in June 2021. Many Salvadorans signed up for digital wallets to receive $30 in bitcoin but quickly cashed out the cryptocurrency.
While some praised the government's move, others highlighted the risks associated with bitcoin's volatility. The International Monetary Fund acknowledged the country's bitcoin holdings and emphasized the need for transparency and risk mitigation.
Although the average Salvadoran does not use bitcoin, those with economic resources have invested in the cryptocurrency. Some individuals, like Esteban Escamilla and Josefa Torres, cashed out their bitcoin for household expenses, missing out on potential gains.
El Salvador's former Central Bank President noted that the government's bitcoin gains remain unrealized until sold. Despite the optimism surrounding bitcoin, concerns persist about its impact on fiscal and financial stability.
As El Salvador navigates the implications of its bitcoin adoption, the country continues to grapple with the challenges and opportunities presented by the cryptocurrency market.
