El Salvador moves $386m worth of Bitcoin into cold storage

El Salvador has shifted a significant portion of its Bitcoin (BTC) assets into a secure cold wallet, as announced by President Nayib Bukele. 

The Central American nation, under newly re-elected President Nayib Bukele’s guidance, revealed its considerable Bitcoin holdings, totaling 5,689.68 BTC, currently valued at over $386 million.

This relocation into an offline vault within the nation’s borders marks the creation of the country’s first official “bitcoin piggy bank,” per President Bukele’s words.

The step not only showcases El Salvador’s commitment to leveraging cryptocurrency for economic growth but also addresses security concerns by safeguarding against potential cyber-attacks.

Since adopting Bitcoin as legal tender in September 2021, amidst International Monetary Fund (IMF) skepticism, El Salvador has been on a quest to revolutionize its economy. 

By bringing cryptocurrency into the mainstream, the nation aimed to lower overseas remittance fees and bank the unbanked, a significant concern given that 70% of Salvadorans are outside the traditional financial system.

The move to a cold wallet comes amidst ongoing efforts to generate income through Bitcoin, as evidenced by substantial profits from mining and the Bitcoin-powered Freedom Visa passport program, as highlighted by President Bukele in a recent exchange on social media with crypto influencer Crypto Rover.

Despite the ambitious crypto initiatives and the recent surge in Bitcoin value, skepticism remains among the Salvadoran population regarding the digital currency’s volatility and usability in a predominantly cash-based society.

But it’s not just about financial gain. El Salvador’s grand vision extends to establishing a tech hub that attracts talents worldwide, further evidenced by recent legislative changes and strategic meetings with potential sovereign investors. 

El Salvador’s policies, such as the elimination of income tax on international investments and money transfers and its Bitcoin-powered passport program, are helping it carve a niche as a place for global crypto innovation and investment.

When BTC hit a new all-time high on March 14, when it went above $73,000, El Salvador’s holdings would have been worth more than $415 million. The coin is currently holding just above $68,000, a slight 0.8% drop from the previous 24 hours, but still more than 30% higher than where it was 30 days ago.