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El Salvador could become a key ally for incoming U.S. President Donald Trump.
It was the first country in the world to establish Bitcoin as legal tender and Trump has positioned himself as a crypto champion, reportedly holding over $9 million worth of cryptocurrency and tokens. The Republican candidate’s victory in the United States presidential election even triggered a major crypto bull run.
According to investment manager VanEck, this may be welcomed in El Salvador, where its Bitcoin-loving leader, President Nayib Bukele, is said to have brought the country back from the brink and turned it into “Latin America’s ultimate comeback story.”
How El Salvador Became Latin America's Comeback Story: New VanEck Research https://t.co/mygU0TbTJs
— Nayib Bukele (@nayibbukele) November 25, 2024
Matthew Sigel, the firm’s head of digital assets research, wrote in a post that the country had managed to defy “global skepticism,” achieving measurable success.
El Salvador’s relationship with Bitcoin and Trump’s newfound support
In 2021, El Salvador adopted Bitcoin as a legal tender to boost investment and financial inclusion, giving $30 in Bitcoin via the Chivo Wallet. By 2024, 8% of Salvadorans used Bitcoin for payments. The government now holds 6,150 BTC ($600M), representing 1.6% of its $36 billion GDP.
The report also suggests that with Trump’s documented support for Bitcoin and focus on reshoring and “friend-shoring” supply chains, “El Salvador could emerge as a strategic partner in U.S. efforts to build regional alliances.”
A June 2024 visit to El Salvador by Trump advisors, warmly welcomed by the Bukele administration, has sparked speculation about potential collaboration in manufacturing, energy, migration, and Bitcoin mining.
That said, the firm claims that the International Monetary Fund is keen to secure a deal before the Trump administration takes office, fearing that a shift in U.S. policy “could alter the negotiation dynamics.”
President Bukele has invested national funds in Bitcoin, a move that has proven profitable as the asset’s value has surged. El Salvador now holds over 5,900 Bitcoins valued at $555.6 million, according to SpotOnChain data, and actively mines the cryptocurrency.
Featured image: Canva / Gage Skidmore via Wikicommons
