Main Points:
- Surge in Unrealized Gains: El Salvador’s 6,181 BTC hoard is now valued at roughly $644 million, yielding an unrealized profit of $357 million as of May 19, 2025.
- Continuing Accumulation Strategy: Despite IMF concerns, President Nayib Bukele maintains a “1 BTC per day” purchase policy, having added 79 BTC since March.
- Volcano-Powered Mining Boost: Geothermal energy from the Conchagua volcano has enabled the state to mine nearly 474 BTC, adding to its reserves without further cash outlay.
- IMF Tensions and Policy Adjustments: The 2023 IMF lending agreement urged restrictions on BTC activity, leading to a 2024 law making Bitcoin acceptance voluntary—yet accumulation persists.
- Global Digital Currency Movements: While El Salvador doubles down on Bitcoin, major economies pursue CBDCs: China’s digital yuan transaction volume leapt to 1.8 trillion CNY by mid-2023, and Project mBridge is testing cross-border CBDC settlements.
Surge in Unrealized Gains
El Salvador’s decision to adopt Bitcoin as legal tender in September 2021 has produced remarkable paper profits. According to data shared by President Nayib Bukele on X, the nation’s Bitcoin wallet now holds 6,181 BTC, acquired at a total cost of $287.1 million. At a market price near $103,051 per BTC on May 19, 2025, this stash is valued at approximately $644.4 million—translating to an unrealized gain of about $357.3 million.
Bitcoin has remained above the psychologically significant $100,000 mark for weeks. On May 20, 2025, BTC/USD hovered around $105,163, reflecting a +0.96% gain for the day and bolstering El Salvador’s Bitcoin reserves further.
Evolution of El Salvador’s BTC Strategy
Since becoming the first country to legalize Bitcoin, El Salvador pursued a disciplined accumulation plan. Bukele’s “1 BTC per day” policy has persisted even under financial pressure and IMF scrutiny. As of March 2025, the government held 6,102 BTC, valued then at about $550 million. The subsequent addition of 79 BTC underscores the administration’s commitment to its crypto-first approach.
These incremental purchases have been central to El Salvador’s narrative of financial innovation. Bukele’s succinct X post—employing only emojis—nonetheless conveyed the potency of the nation’s Bitcoin operation and galvanized domestic support among crypto-enthusiasts.
Geothermal Mining and Growing Reserves
Beyond direct purchases, El Salvador leverages its volcanic terrain for in-house Bitcoin mining. Since 2021, the state’s volcano-powered facilities have generated nearly 474 BTC at minimal marginal cost, adding roughly $50 million in value at current prices. This novel approach to self-mining enhances reserves without drawing on treasury funds.
The geothermal mining venture showcases an inventive synergy between renewable energy and digital assets, aligning with global calls for sustainable crypto practices. By reinvesting mined BTC into reserves, El Salvador further cements its position as a pioneering nation in state-level crypto economics.
IMF Tensions and Policy Adjustments
El Salvador’s bold Bitcoin experiment has not been without controversy. In December 2023, the IMF conditioned a $1.4 billion loan on curbing public-sector Bitcoin activities, citing fiscal risk concerns. In response, El Salvador passed a law in January 2024 making businesses’ acceptance of Bitcoin voluntary—a legislative concession that placated the IMF while preserving the government’s buying program.
Despite these tensions, Bukele’s administration has continued to add to its Bitcoin stack. IMF reports in March 2025 still noted ongoing accumulation, signaling a de facto retention of the initial strategy. The resulting synergy of concession and persistence illustrates a pragmatic balancing act between international lenders and national visionaries.
Global Digital Currency Movements
El Salvador’s state-level BTC holdings stand in stark contrast to other nations’ measured CBDC explorations. China leads the pack with its digital yuan (e-CNY)—transactions soared from 100 billion CNY in August 2022 to 1.8 trillion CNY by June 2023, covering 950 million transactions across 120 million wallets. Although e-CNY accounts for just 0.16% of China’s M0 money supply, its growth underscores central banks’ race to digitize fiat.
Meanwhile, Project mBridge—a consortium including the People’s Bank of China, the BIS Innovation Hub, and central banks of Thailand, UAE, Hong Kong, and Saudi Arabia—is trialing real-time cross-border payments with CBDCs on a shared blockchain platform. These initiatives aim to streamline settlements and challenge the dollar-centric paradigm.
Future Outlook and Implications
El Salvador’s Bitcoin endeavor raises critical questions for global finance:
- Monetary Sovereignty vs. Volatility: Can a small economy withstand crypto’s gyrations while preserving currency stability?
- Fiscal Risk Management: How will treasury operations evolve if unrealized gains turn into realized losses amid price corrections?
- International Precedent: Will other nations follow suit, adopting private cryptocurrencies as legal tender, or double down on state-issued digital currencies?
Analysts remain divided. Anthony Scaramucci foresees Bitcoin reaching $180,000–$200,000 by end-2025, driven by institutional adoption and scarcity narratives. Conversely, cautionary voices point to cyclical downturns and regulatory headwinds potentially dragging BTC back toward $85,000 before another bull run.
Conclusion
El Salvador’s Bitcoin experiment has delivered a staggering $357 million in unrealized gains, underscoring the potency of state-level crypto accumulation bolstered by renewable-powered mining. While IMF-mandated concessions tempered the policy landscape, the nation’s unwavering purchase program continues to defy traditional fiscal orthodoxy. Against a backdrop of accelerating CBDC pilots worldwide, El Salvador stands out as a case study in the disruptive potential—both celebrated and contested—of integrating decentralized assets into sovereign finance. How this bold strategy shapes the country’s economic trajectory and influences other governments will be closely watched as Bitcoin charts its next chapter.
