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El Salvador's Bitcoin vault: Secure cold storage revealed

Once again making headlines for its significant involvement in Bitcoin, El Salvador recently opted to securely store $400 million worth of the digital currency in cold storage. This decision coincided with a market downturn, with Bitcoin experiencing a decrease of over 8% from its value, alongside a broader decline in the cryptocurrency market.

President Nayib Bukele plans to create a “Bitcoin piggy bank” and continue its strategy of purchasing one BTC per day. Cold storage is a security measure that stores digital assets offline on encrypted external hard drives away from the internet. He also disclosed that the nation’s Bitcoin assets will be kept safe in a country-based vault.

Accolades from the Internet

Numerous social media users praised El Salvador and President Bukele for their stance on Bitcoin and his transparent communication. “It’s remarkable to witness a president openly discussing a nation’s self-custody of Bitcoin. It’s no surprise that Bitcoin enthusiasts feel embraced in El Salvador,” remarked one user.

Another expressed, “President Nayib Bukele’s leadership and forward-thinking vision have broken barriers. We’re witnessing the dawn of a new era. El Salvador is making significant strides toward becoming a frontrunner in the cryptocurrency market, particularly with Bitcoin.”

El Salvador Reveals Exact Bitcoin Holdings

In a recent X post, a picture of the wallet was shared, showcasing its contents: 5,689.68 BTC valued at $388.7 million (based on the current Bitcoin price). Bukele took the unprecedented step of publicly disclosing the wallet address, allowing the audience to monitor Bitcoin’s movement and growth. This bold move by Bukele underscores El Salvador’s influence in the crypto industry.

The revelation that El Salvador holds twice the anticipated number of Bitcoins was unexpected. Nayib Bukele has consistently emphasized its commitment to Bitcoin investment, frequently updating social media followers on new acquisitions. Despite analysts’ earlier estimations placing El Salvador’s Bitcoin holdings at around $200 million, the figure stood at $411 million on the day of the Bitcoin piggy bank announcement.

Drop in Bitcoin Rate

Bitcoin’s price has dropped by 7% from its all-time high of $73,750 on March 14. It is currently trading at $67,741.9, marking a 4.6% decrease. The market cap has also declined to $1.33 trillion, down by 3.5%. Despite this, trading volume has surged by over 76%, reaching $81.81 billion.

Following a period of bearish trends, Bitcoin has entered a bullish zone since the beginning of the year, with a significant surge in mid-February pushing it above the previous all-time high.

BTC’s price decline has impacted the broader crypto market, leading to a 5.85% overall crash earlier today. While some recovery has been observed, the future trajectory remains uncertain.

Other cryptocurrencies, such as ether or Ethereum, have also registered increases in their price.

Eighty-eight percent of Salvadorans did not use Bitcoin in their transactions in 2023, according to a survey by the private Central American University (UCA) in January. Bukele has sought to use Bitcoin to pull in overseas remittances at a lower cost and for Salvadorans, 70% of whom operate outside the financial system, to become more banked.

Burger for a Bitcoin in El Salvador

In El Salvador, Bitcoin is now used for various everyday transactions, including paying for McDonald’s orders, showcasing its integration into daily life.

In 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender. However, this decision faced criticism from the International Monetary Fund, leading to citizen protests. President Bukele proposed powering Bitcoin mining operations in the country using geothermal energy from a volcano. As he embarks on his second presidential term, the fulfillment of this promise remains to be seen.