In September 2021, El Salvador made history by becoming the first country in the world to adopt Bitcoin as legal tender. This bold move, spearheaded by President Nayib Bukele, aimed to promote financial inclusion and economic growth. However, the journey has been far from smooth. Despite initial enthusiasm, the implementation faced challenges, including skepticism from the public and international institutions.
Fast forward to November 2022, amidst a turbulent crypto market, El Salvador introduced a new strategy: purchasing one Bitcoin daily. This decision was made in response to the market downturn following the collapse of the FTX exchange. The government committed to this dollar-cost averaging (DCA) approach, aiming to accumulate Bitcoin steadily over time, regardless of market fluctuations.
As of June 29, 2025, El Salvador continues this daily acquisition strategy, reinforcing its commitment to Bitcoin as a sovereign store of value. This approach has not only bolstered the country’s Bitcoin reserves but also positioned El Salvador as a unique case study in national cryptocurrency adoption.
In this article, we will delve into the details of El Salvador’s “1 Bitcoin a Day” strategy, examining its origins, execution, and the broader implications for the nation’s economy and the global cryptocurrency landscape.
The Genesis of the DCA Strategy
In November 2022, as the cryptocurrency market grappled with the aftermath of the FTX collapse—a scandal that had sent shockwaves through the industry—El Salvador’s President Nayib Bukele unveiled a bold move: the nation would begin purchasing one Bitcoin daily. This decision was grounded in a dollar-cost averaging (DCA) strategy, a method that involves buying a fixed dollar amount of an asset at regular intervals, regardless of its price. The goal was clear: to accumulate Bitcoin steadily over time, mitigating the risks associated with market volatility.
The timing of this announcement was particularly noteworthy. Bitcoin’s price had plummeted from over $21,000 to under $17,000 in the wake of the FTX debacle, marking a significant downturn. By committing to buy Bitcoin daily, El Salvador aimed to capitalize on the market’s low point, positioning itself to benefit from any future price appreciation.
This strategy was not just a financial maneuver; it was a statement of intent. El Salvador was doubling down on its commitment to Bitcoin, signaling to the world that it viewed the cryptocurrency not merely as a speculative asset but as a cornerstone of its economic future. The government’s dedication to this approach was underscored by its transparency; each Bitcoin purchase was publicly disclosed, allowing citizens and the global community to track the nation’s growing reserves.
The DCA strategy also served a broader purpose. It was designed to shield the nation’s Bitcoin holdings from the erratic swings that characterize the cryptocurrency market. By purchasing Bitcoin consistently, El Salvador aimed to smooth out the impact of short-term price fluctuations, thereby reducing the risk of making large purchases at inopportune times.
As the months progressed, the strategy began to yield results. By mid-2024, El Salvador had accumulated over 6,000 Bitcoins, with an average purchase price of approximately $44,739 per coin. At that time, Bitcoin’s market value had risen to over $100,000, placing the nation’s holdings in a position of significant unrealized gains.
However, the journey was not without its challenges. The International Monetary Fund (IMF) had expressed concerns about El Salvador’s Bitcoin strategy, suggesting that it could pose risks to the country’s financial stability. In response, El Salvador agreed to certain conditions, including reducing its Bitcoin purchases and removing Bitcoin’s status as legal tender.
Despite these external pressures, El Salvador’s commitment to its DCA strategy remained steadfast. The government continued to acquire Bitcoin daily, demonstrating resilience and a long-term vision for its economic future. This unwavering approach has positioned El Salvador as a unique case study in national cryptocurrency adoption, highlighting both the potential rewards and risks associated with integrating digital assets into a nation’s financial framework.
Mechanics of the “1 Bitcoin a Day” Strategy
El Salvador’s “1 Bitcoin a Day” strategy, initiated in November 2022, is a deliberate and structured approach to accumulating Bitcoin over time. This strategy, known as Dollar-Cost Averaging (DCA), involves purchasing a fixed amount of Bitcoin daily, regardless of its market price. The primary objective is to mitigate the risks associated with Bitcoin’s volatility and to build a substantial reserve that can potentially appreciate over time.
The implementation of this strategy is managed by the National Bitcoin Office of El Salvador. The government has established a dedicated Bitcoin wallet, often referred to as the country’s “Bitcoin piggy bank,” to securely store the acquired assets. These purchases are made using funds from the government’s reserves, ensuring that the strategy is financially sustainable and does not disrupt the national budget.
The process is straightforward: each day, the government allocates a specific amount of fiat currency to purchase one Bitcoin. This consistent acquisition, irrespective of market conditions, allows El Salvador to accumulate Bitcoin steadily. As of June 2025, the country has acquired over 6,000 Bitcoins through this method, with an average purchase price ranging between $44,300 and $45,465 per Bitcoin.
This approach serves multiple purposes. Firstly, it positions El Salvador as a significant holder of Bitcoin, potentially reaping substantial benefits if the cryptocurrency’s value increases. Secondly, it demonstrates the government’s commitment to integrating Bitcoin into the national economy, signaling to both domestic and international stakeholders that El Salvador is serious about its digital asset strategy.
Moreover, the DCA strategy aligns with El Salvador’s broader economic goals. By accumulating Bitcoin, the country aims to diversify its reserves, reducing dependence on traditional assets and mitigating risks associated with global financial instability. This strategy also supports the development of a Bitcoin-based financial infrastructure, including the proposed Bitcoin City, which envisions a tax-free zone powered by geothermal energy from the Tecapa volcano.
In summary, the “1 Bitcoin a Day” strategy is a methodical and forward-thinking approach to integrating Bitcoin into El Salvador’s economic framework. By consistently acquiring Bitcoin, the country not only builds a valuable reserve but also sets the stage for future innovations in the digital economy.
Performance and Impact Assessment
El Salvador’s steadfast commitment to its “1 Bitcoin a Day” strategy has yielded notable financial outcomes. As of June 2025, the country holds approximately 6,222 BTC, valued at around $670 million, reflecting a substantial unrealized profit since the inception of the strategy in November 2022.
This accumulation has positioned El Salvador as a significant player in the global Bitcoin landscape. The government’s average purchase price of approximately $45,450 per BTC contrasts favorably with the current market price of over $107,000, underscoring the financial prudence of the DCA approach.
Beyond financial gains, the strategy has bolstered El Salvador’s geopolitical standing. By maintaining and expanding its Bitcoin reserves, the country has demonstrated resilience and strategic foresight, attracting international attention and investment. This move aligns with broader trends, as other nations, including Bhutan, have also adopted similar strategies, signaling a shift towards recognizing Bitcoin as a legitimate reserve asset.
However, the strategy’s success is not solely measured in financial terms. The government’s transparent approach, including the establishment of a public Bitcoin wallet and regular disclosures of holdings, has fostered trust and accountability. This transparency is crucial in dispelling concerns about potential misuse or mismanagement of the country’s digital assets.
In summary, El Salvador’s “1 Bitcoin a Day” strategy has not only yielded significant financial returns but has also enhanced the country’s international profile and demonstrated a commitment to transparency and innovation in financial governance.
Public and Institutional Reactions
El Salvador’s unwavering commitment to its “1 Bitcoin a Day” strategy has elicited a spectrum of reactions from both domestic and international stakeholders, highlighting the complexities and challenges inherent in pioneering national cryptocurrency adoption.
Domestic Perspectives
Within El Salvador, the government’s Bitcoin initiative has been met with a mixture of skepticism and cautious optimism. Public opinion has been notably divided; surveys indicate that a significant portion of the population remains skeptical about the benefits of Bitcoin integration. A study by the Central American University revealed that 91% of Salvadorans preferred to use the U.S. dollar over Bitcoin, and by 2024, only 8.1% of the population reported using Bitcoin for transactions.
Despite these reservations, there has been a segment of the population that views the government’s Bitcoin strategy as a forward-thinking approach to economic modernization. The establishment of Bitcoin City and the continued accumulation of Bitcoin are seen by some as steps towards positioning El Salvador as a hub for cryptocurrency innovation. The government’s efforts to promote Bitcoin usage, such as distributing $30 worth of Bitcoin to citizens, did not lead to widespread adoption. Many recipients quickly converted their Bitcoin into dollars, and the usage of the Chivo Wallet remained limited.
International Criticism
On the international stage, El Salvador’s Bitcoin initiative attracted criticism from financial institutions and economists. The International Monetary Fund (IMF) expressed concerns about the potential risks associated with Bitcoin, including its volatility and the possibility of it being used for illicit activities.
In response to these concerns, El Salvador entered into a $1.4 billion loan agreement with the IMF in December 2024. As part of the agreement, the country committed to limiting its Bitcoin-related activities, including ceasing further accumulation of Bitcoin by the public sector and removing Bitcoin’s status as legal tender.
However, despite these commitments, El Salvador has continued its Bitcoin purchases, leading to tensions with the IMF. The IMF has reiterated its stance, stating that efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged.
Implications of Public and Institutional Reactions
The divergent reactions to El Salvador’s Bitcoin strategy underscore the challenges faced by nations attempting to integrate cryptocurrency into their economic frameworks. While the government’s actions have positioned El Salvador as a leader in national cryptocurrency adoption, they have also exposed the country to potential financial and reputational risks.
While El Salvador continues its Bitcoin journey, the interplay between domestic aspirations and international pressures will likely shape the future trajectory of its cryptocurrency policies.
Future Outlook and Strategic Adjustments
El Salvador’s Bitcoin strategy, initiated in 2021, has undergone significant transformations in response to both internal and external pressures. As of mid-2025, the country continues to navigate the complex landscape of integrating cryptocurrency into its national framework.
Strategic Adjustments Post-IMF Agreement
In December 2024, El Salvador entered into a $1.4 billion agreement with the International Monetary Fund (IMF), leading to notable changes in its Bitcoin policy. The reforms included removing Bitcoin’s status as legal tender, ceasing mandatory acceptance by businesses, and halting Bitcoin tax payments. Despite these adjustments, the government has maintained a voluntary approach to Bitcoin adoption and continues to accumulate Bitcoin through private sector channels, aligning with the IMF’s stipulations.
Economic and Financial Implications
El Salvador’s Bitcoin holdings have experienced significant fluctuations, reflecting the volatile nature of the cryptocurrency market. As of June 2025, the country’s Bitcoin reserves have appreciated by approximately 12.15%, adding $69.8 million to their value. This growth underscores the potential financial benefits of Bitcoin accumulation. However, the country remains cautious, balancing the desire for economic innovation with the need for financial stability.
Technological and Infrastructure Developments
El Salvador continues to invest in technological infrastructure to support its digital asset strategy. The planned Bitcoin City, located at the base of the Conchagua volcano, aims to leverage geothermal energy for sustainable Bitcoin mining. Additionally, the construction of the Airport of the Pacific is underway to enhance connectivity and support the envisioned Bitcoin hub.
Public Perception and Adoption
Public adoption of Bitcoin remains a challenge. Surveys indicate that a significant portion of the population remains skeptical about the benefits of Bitcoin integration. The government’s efforts to promote Bitcoin usage, such as distributing $30 worth of Bitcoin to citizens, did not lead to widespread adoption. Many recipients quickly converted their Bitcoin into dollars, and the usage of the Chivo Wallet remained limited.
Final Take
El Salvador’s journey with Bitcoin is a dynamic and evolving narrative. The country’s commitment to integrating cryptocurrency into its economic framework demonstrates a willingness to innovate and adapt. As El Salvador continues to navigate the complexities of this integration, its experience offers valuable insights into the challenges and opportunities of adopting digital assets at a national level.
As the global landscape of cryptocurrency continues to evolve, El Salvador’s ongoing initiatives, including the development of Bitcoin City and the establishment of the Airport of the Pacific, will be closely watched. These projects, alongside the country’s strategic Bitcoin reserves, underscore El Salvador’s commitment to exploring the potential of digital currencies while navigating the complexities of international finance and domestic considerations.
In conclusion, El Salvador’s Bitcoin experiment is far from over. The nation’s ability to adapt, innovate, and engage in constructive dialogue with international financial institutions will determine the trajectory of its digital currency initiatives and their impact on the broader global economy.
