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El Salvador’s Bold Bitcoin Move Yields Massive Unrealized Profits

El Salvador’s historic bet on Bitcoin has paid off—at least on paper—with $357 million in unrealized profits. Explore how the country’s bold strategy, market timing, and comparisons to private firms like Metaplanet could shape the future of national crypto adoption.

In 2021, El Salvador made global headlines by becoming the first country to adopt Bitcoin as legal tender. What was initially seen as a bold, and to some, reckless experiment has now started to yield impressive financial outcomes—at least on paper. As of May 2025, El Salvador’s Bitcoin holdings are valued at $644.4 million, generating an unrealized profit of $357.2 million, representing a 124% gain from its initial $287.2 million investment.

Table of Contents

The Strategy Behind the Bitcoin Bet

President Nayib Bukele has been the chief architect of El Salvador’s Bitcoin strategy. The government's approach involves accumulating and holding Bitcoin through market cycles without liquidating, despite high volatility. This "HODL" strategy aligns with the investment mindset seen within some crypto communities and forward-looking institutions.

Bukele recently shared the country’s Bitcoin portfolio dashboard on social media, showcasing not only the size of the holdings but also its performance. Year-to-date, the position has appreciated by over $69 million, reinforcing the administration’s stance that crypto can serve as a national asset class.

Market Timing and Volatility

El Salvador’s Bitcoin journey has not been smooth. The country experienced major drawdowns during the 2022 bear market, with critics lambasting the strategy as financially irresponsible. However, Bitcoin’s sharp recovery—approaching record highs near $103,000—has validated the long-term bet, at least temporarily.

The government’s refusal to sell any of its holdings means all profits remain unrealized, providing no immediate liquidity but substantially improving the country's balance sheet on paper. This distinction is crucial in assessing both the success and the risk of the investment.

Comparative Case: Metaplanet Inc.

Interestingly, El Salvador’s move is no longer isolated. Japan’s Metaplanet Inc., a Tokyo-listed investment company, has begun adopting a similar strategy. Since April 2024, the firm has accumulated 7,800 BTC, investing over $800 million into Bitcoin. Its latest acquisition came at an average price of $103,873 per BTC, and it aims to reach 10,000 BTC by the end of 2025.

What sets Metaplanet apart is its financing method: it has issued 15 rounds of bonds, raising dedicated capital for Bitcoin purchases. The company’s willingness to leverage traditional debt instruments for crypto accumulation mirrors the innovative, and risky, nature of El Salvador’s policy.

Risks and Criticisms

While the unrealized gains appear impressive, they also come with significant caveats. First, the volatility of Bitcoin means these gains can evaporate quickly. Without liquidation, these are paper profits and cannot be used for national expenditures or debt payments.

Second, the concentration risk is notable. A large portion of the country’s financial hope now hinges on the fate of a single, highly volatile asset. A significant downturn could once again turn public opinion and global scrutiny against the strategy.

Moreover, critics argue that the lack of transparency about the precise mechanics of the Bitcoin purchases—such as the wallets used and acquisition methods—raises accountability issues.

Implications for Global Crypto Adoption

El Salvador’s success story may catalyze a wave of crypto-financial experimentation among other emerging markets. For countries battling inflation, restricted access to capital markets, or seeking alternative reserve assets, Bitcoin presents a potentially attractive, albeit risky, solution.

Institutions and governments alike will be watching El Salvador closely. If the country eventually realizes its profits strategically—whether through partial liquidation, lending, or leveraging its BTC holdings—it could establish a blueprint for Bitcoin-backed economic innovation.

Conclusion

El Salvador’s Bitcoin strategy has flipped the narrative from recklessness to potential brilliance, at least temporarily. As unrealized profits mount, the government’s patience is being rewarded—but the strategy is far from risk-free.

The country remains a crypto pioneer, navigating uncharted economic territory where sovereign finance meets decentralized assets. Whether this bold experiment becomes a sustainable model or a cautionary tale depends not only on Bitcoin’s future but also on how El Salvador manages its crypto fortune moving forward.

FAQs

How much has El Salvador profited from its Bitcoin investment?

As of May 2025, El Salvador has an unrealized profit of $357.2 million, stemming from an initial investment of $287.2 million. The total value of its Bitcoin holdings stands at approximately $644.4 million.

Has El Salvador sold any of its Bitcoin?

No. The government has not sold any of its Bitcoin holdings. All profits are currently unrealized, meaning they are based on current market value but have not been converted into actual cash.

Why did El Salvador invest in Bitcoin?

The country, under President Nayib Bukele, adopted Bitcoin as legal tender in 2021 to promote financial inclusion, reduce remittance fees, and attract foreign investment. Bitcoin was also viewed as a hedge against inflation and economic instability.

What are the risks of El Salvador’s Bitcoin strategy?

The main risks include market volatility, lack of liquidity (since no BTC has been sold), and concentration risk, as a significant portion of the country’s financial prospects are now tied to a single digital asset.

Who else is following a similar strategy?

Metaplanet Inc., a Tokyo-listed investment firm, has adopted a similar Bitcoin accumulation strategy. It holds 7,800 BTC and plans to acquire 10,000 BTC by the end of 2025, funding the purchases through bond issuances.

That's all for today, see ya tomorrow! If you want more, be sure to follow our X (@croxroadnewsco), Instagram (@croxroadnews.co), Youtube (@thebitcoinlibertarian), Tiktok (@croxroadnews) and nostr - [email protected]

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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