In 2021, El Salvador did something no other nation had dared: it declared Bitcoin legal tender. Overnight, this small Central American country vaulted onto the global stage as the first sovereign to tie its economic identity to a cryptocurrency. To skeptics, it was reckless. To optimists, visionary. But everyone agreed — it was bold.

Current State of BTC in El Salvador

Since its initial adoption, El Salvador's Bitcoin strategy has continued to evolve. While Bitcoin's status as legal tender has been scaled back to voluntary use since January 2025, largely due to pressure from the International Monetary Fund (IMF) during loan negotiations, the government maintains a strong commitment to its Bitcoin holdings and related initiatives. The national reserve currently holds nearly 6,300 BTC, valued at nearly $700 million.

Notably, the government recently took steps to enhance the security of these holdings by redistributing the entire reserve from a single address into 14 separate addresses, each holding a maximum of 500 BTC. This move is intended to mitigate potential future risks associated with quantum computing and aligns with best practices in Bitcoin custody. A public dashboard is now available for tracking these addresses, aiming to maintain transparency without compromising security.

Despite the policy shift regarding Bitcoin's legal tender status and reports contradicting official claims of daily purchases since February 2025, El Salvador continues to position itself as a hub for financial innovation. The nation has seen significant growth in tourism, partially attributed to its Bitcoin adoption and improved security measures, welcoming 3.9 million visitors in 2024.

El Salvador also plans further initiatives, including developing Bitcoin City and leveraging its geothermal energy for Bitcoin mining. This ongoing commitment, despite challenges like low local adoption rates and IMF pressure, highlights the country's dual focus on technological innovation and economic stability.

Measured against El Salvador’s $35 billion GDP, the country’s Bitcoin bet represents nearly 2% of its entire economy. In relative terms, it’s no longer a sideshow.

Which raises an interesting thought experiment: What if the United States had done the same?

Scaling the Bet to Washington

Let’s rewind to 2021. The U.S. economy at the time was worth about $23 trillion. If Washington had mirrored El Salvador’s strategy — allocating 2% of GDP to Bitcoin — the Treasury would have bought roughly $460 billion worth of BTC.

Fast forward to today. That position would be valued at around $760 billion. The unrealized gain? About $300 billion.

For El Salvador, such a windfall would change the national trajectory. For the United States, it’s more complicated. Three hundred billion dollars is real money — but in a $30 trillion economy, it represents just about 1% of GDP.

How Much Is $300 Billion, Really?

Numbers in the hundreds of billions tend to float in abstraction, but let’s put them in perspective.

• The Department of Education runs on roughly $79 billion a year. A $300 billion crypto profit could cover four years of national education spending.
• NASA gets around $25 billion annually. $300 billion could keep rockets flying for a dozen years straight.
• The SNAP program — food assistance for more than 40 million Americans — costs about $120 billion annually. Bitcoin gains could keep it running for two and a half years.
• Or, the U.S. could wipe out roughly a third of the nation’s outstanding student loan debt.

Suddenly, a speculative position starts to look like fiscal firepower.

A Big Deal for One, a Rounding Error for Another

That’s the heart of this comparison. For El Salvador, 2% of GDP in Bitcoin is a material macroeconomic choice — something that could shift debt ratios, fund infrastructure, or buffer a recession. For the United States, the same proportional bet would be little more than an accounting footnote, a clever gain but not a structural transformation.

Scale matters. And it’s precisely this asymmetry that makes El Salvador’s play so fascinating.

Why Bet the Treasury on Bitcoin?

For President Nayib Bukele and his government, the upside is obvious:

• Diversification. Instead of keeping reserves solely in dollars or bonds, Bitcoin provides an uncorrelated hedge.
• Branding. The “Bitcoin Nation” experiment has turned San Salvador into a global crypto curiosity, attracting tourists, investors, and headlines far beyond what a country of six million usually commands.
• Asymmetric upside. Even if the gamble fails, the cost relative to GDP is modest. If it succeeds, it could reshape the nation’s fiscal future.

But there are risks, too:

• Volatility. Bitcoin could halve in value in a bear market.
• Liquidity. Unlike Treasuries, Bitcoin can’t easily be liquidated to meet short-term obligations without rattling markets.
• Diplomatic friction. The IMF has already signaled discomfort, wary of lending to a country so tied to crypto.
• Reputational risk. If Bitcoin falters, El Salvador could falter with it.

The Broader Questions

The Salvadoran experiment invites thought experiments that ripple beyond its borders. What if small Caribbean states or Sub-Saharan nations adopted similar strategies? What if the IMF itself held Bitcoin in its reserves?

It also prompts a behavioral finance question: was El Salvador simply an early adopter willing to stomach volatility, while the U.S. played the role of the cautious institutional investor? Both approaches are rational — but they reveal different appetites for risk and different stakes in the global system.

And then there’s the future. If Bitcoin climbs to $200,000, El Salvador’s holdings could swell to 4–5% of GDP, creating something like a sovereign wealth fund out of thin air. A U.S. equivalent could yield $500–700 billion in unrealized gains — on par with major annual tax revenue streams.

A Lottery Ticket with Real Odds

Perhaps the best way to frame it is this: El Salvador bought a lottery ticket — but one with better odds than, e.g., winning a Powerball jackpot. It was a calculated moonshot, one that could meaningfully alter the country’s economic story without exposing it to existential collapse if things went wrong.

For the United States, the same play would have been safe enough to make billions but too small to matter in structural terms. For El Salvador, the bet is existential, symbolic, and, potentially, destiny-shaping.

Will the Gamble Pay Off?

El Salvador’s Bitcoin stash won’t rewrite its economy overnight. But it has already rewritten the narrative of what small nations can do when they step outside orthodoxy.

For the U.S., the thought experiment underscores the scale gap: what’s life-changing for a small country is just a rounding error for a superpower. Yet symbolism matters. The question is no longer whether countries can hold Bitcoin — but whether, in an age of inflation, debt, and currency wars, they can afford not to.

El Salvador may have bought Bitcoin. But more importantly, it bought a place in financial history.

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