El Salvador's President Nayib Bukele transfers a significant amount of Bitcoin into cold storage, sparking discussions on cryptocurrency adoption and challenges.
El Salvador's President Nayib Bukele showcased a bold move on X platform, announcing the transfer of a significant portion of the country's Bitcoin treasury into a cold wallet, destined for secure storage in a national vault.
According to the screenshot shared by Bukele, the cold wallet now holds 5,689 Bitcoin, valued at $406 million at the time of the transfer. This suggests a Bitcoin price of around $71,463 when the funds were moved, correlating with the wallet's initial transaction on Tuesday, March 12.
Previously, El Salvador was believed to possess 2,848 Bitcoin, valued at $173 million as of late February, according to Decrypt's previous coverage. Bukele has consistently commented on Bitcoin's price movements since declaring it legal tender in 2021, initiating innovative projects such as Bitcoin mining powered by geothermal energy and introducing Bitcoin "volcano bonds."
"We've decided to transfer a big chunk of our #Bitcoin to a cold wallet, and store that cold wallet in a physical vault within our national territory.
You can call it our first #Bitcoin piggy bank 🇸🇻
It's not much, but it's honest work 😂 pic.twitter.com/dqzedykxT1
— Nayib Bukele (@nayibbukele) March 14, 2024
Despite Bukele's recent reelection for another 5-year term in February, El Salvador has faced opposition from international bodies like the International Monetary Fund, which opposed the country's decision to adopt Bitcoin as legal tender. Additionally, U.S. lawmakers have expressed concerns about the implications of Bitcoin adoption in El Salvador on American interests.
The integration of Bitcoin into El Salvador's economy has brought challenges, including managing fluctuating transaction fees. For instance, when Bitcoin Ordinals surged in popularity in May 2023, transaction fees skyrocketed to over $30 per transaction.
An El Salvadoran citizen, Marce Romero, noted at the time that transaction fees were making small transactions costly, suggesting that Bitcoin's utility extends beyond "fkn jpegs" (referring to NFTs).
Blockchain data reveals that the majority of Bitcoin transferred to El Salvador's cold wallet, approximately 4,568 BTC, originated from the crypto exchange Bitfinex. The most recent transaction, transferring 4,007 BTC to the cold storage wallet, occurred last night.
As of the latest update, the Bitcoin price stands at $67,934, having experienced an 8% decrease in the past day. This drop was triggered by Grayscale's movement of $400 million worth of BTC to Coinbase for sale, exerting downward pressure on the market.
Despite market fluctuations, the Bitcoin holdings in El Salvador's treasury wallet continue to grow. At the time of writing, the wallet contains 5,689.7 BTC, equivalent to approximately $415 million.
"You can call it our first Bitcoin piggy bank," remarked Bukele on X. "It's not much, but it's honest work."