Betting on Bitcoin’s future pays off

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Two small countries, El Salvador and Bhutan, have made bold moves into the Bitcoin (BTC) arena, showing how cryptocurrency can redefine economic strategies for countries with assertive leadership and limited resources. Bhutan has accumulated Bitcoin assets of over $1 billion (more than a third of GDP) through its sovereign investment arm, while El Salvador’s reserves stand at approximately 6,150 Bitcoins worth over $550 million. These investments are declarations of belief in Bitcoin’s long-term potential to drive economic transformation and resilience.

Under the visionary leadership of President Nayib Bukele, El Salvador has become a symbol of crypto innovation. Since adopting Bitcoin as a legal tender in 2021, the country has gained significant global attention, demonstrating the viability of the cryptocurrency as a tool for financial inclusion, foreign investment and economic growth. Bhutan, on the other hand, has taken a more affordable approach, leveraging its abundant hydroelectric resources to establish itself as a sustainable Bitcoin mining hub. Together, these countries highlight the opportunities Bitcoin offers to those willing to embrace its volatility and invest in its upward trajectory.

El Salvador: A sign of Bitcoin-powered growth

El Salvador’s Bitcoin experiment has become the cornerstone of President Bukele’s sweeping financial and economic reforms. From creating the world’s first legal framework for Bitcoin to launching plans for a tax-free Bitcoin City powered by geothermal energy and financed with $1 billion in “Volcano Bonds”, the country has positioned itself as a crypto pioneer. These bold initiatives are visionary and based on tangible results: El Salvador’s GDP increased by 19% between 2021 and 2023, while the debt/GDP ratio fell from 95% in 2020 to 59% in 2024.

Bitcoin has also transformed the remittance industry, which has been a lifeline for millions of Salvadorans living abroad. The government has made direct Bitcoin transfers possible by eliminating traditional intermediaries, lowering fees, and making transactions faster and more accessible. This move alone saved millions in fees and strengthened Bitcoin’s potential to empower ordinary users.

Beyond remittances, El Salvador has witnessed a surge in foreign investment and tourism as crypto enthusiasts and digital nomads flock to the country. Casinos and restaurants are increasingly accepting Bitcoin as a means of payment; This shows that confidence in the role of cryptocurrency in the country’s economy is increasing. As adoption continues among citizens, Bitcoin’s rising value has already bolstered the country’s treasury and proven its value as a store of value.

Bhutan: Bitcoin mining for sustainable growth

Bhutan’s approach to Bitcoin was more methodical and strategic, focusing on mining rather than adopting it as a currency. Using its vast renewable hydroelectric resources, Bhutan has built one of the most efficient Bitcoin mining operations in the world. The country’s sovereign fund, Druk Holding & Investments, has turned Bitcoin into a profitable national asset, with assets exceeding $1 billion.

Bitcoin mining with renewable energy both establishes Bhutan as a model of sustainability and underscores its ability to leverage its unique geographical advantages. Such an approach shows how small nations can develop cryptocurrencies to their strengths, creating new revenue streams while minimizing environmental concerns.

While Bhutan’s foray into Bitcoin has not been without its challenges (its association with failed platforms such as BlockFi and Celsius highlights the risks of overexposure to the crypto market), the country’s leadership has remained committed to using Bitcoin as a tool for long-term growth. Bhutan’s story provides a compelling example for countries exploring Bitcoin as part of a diversified financial strategy.

The big picture: Bitcoin as a national reserve

El Salvador and Bhutan’s strategies point to a broader trend: growing interest in Bitcoin as an alternative to traditional reserve assets such as gold or oil. Proponents argue that Bitcoin’s decentralization and fixed supply make it an attractive store of value, immune to the inflationary pressures that erode fiat currencies. While critics point to Bitcoin’s volatility as a limitation, these countries are relying on Bitcoin’s long-term uptrend to solidify their economic foundations.

President Bukele’s vision for Bitcoin City exemplifies this belief. Designed as a tax-free zone powered entirely by renewable geothermal energy, the city will attract global investments and strengthen El Salvador’s position as a Bitcoin hub. Bhutan’s mining operations similarly reflect confidence in Bitcoin’s role as a transformative asset capable of increasing national income and innovation.

Other countries are taking this into consideration. Argentina, under its pro-crypto leadership, is reportedly exploring strategies similar to El Salvador’s Volcano Bonds to stabilize its economy and attract foreign investment. As Bitcoin continues its upward trend, the successes of El Salvador and Bhutan could inspire a new wave of crypto-focused economic policies around the world.

Balancing Risk and Reward

El Salvador and Bhutan’s bold strategies come with inherent risks. Bitcoin’s volatility remains an issue, exposing these countries to potential economic shocks during crises. But history shows that every emerging technology faces skepticism and growth cycles before becoming mainstream. These countries embrace innovation, trust Bitcoin, and understand that its transformative potential outweighs short-term uncertainties.

For El Salvador, Bitcoin has already proven its value as a store of wealth, with the treasury benefiting from significant price increases. Bhutan’s strategic mining investments similarly highlight Bitcoin’s sustainable income-generating power. Both countries are showing that with careful planning and strong leadership, Bitcoin can be more than a speculative asset, it can be the cornerstone of national economic strategy.

Bitcoin’s transformative promise

El Salvador and Bhutan have charted bold paths towards the crypto frontier. They show how small nations can leverage Bitcoin to foster innovation, financial inclusion and economic growth. And their story isn’t just about profiting from Bitcoin’s price increases, it’s about redefining what’s possible when nations commit to decentralized assets as a key component of their economic strategies.

Bitcoin continues its global rise and these countries stand as examples of what can be achieved with courage and vision. Although challenges remain, the success of El Salvador and Bhutan sends a strong message: Bitcoin is not just a gamble, it is a game changer. For countries looking to embrace the future, the rewards may far outweigh the risks.

Maksym Sakharov

Maksym Sakharov is group CEO, co-founder and board member of WeFi, an on-chain, non-custodial neobank. With over eight years of management experience in the IT industry, Maksym has a diverse set of skills covering strong leadership, operational excellence and service delivery. He served as the CEO and co-founder of Exflow, as well as the founder and CEO of Whitemark. His career spans a variety of environments, from start-ups to established IT development firms where he has successfully managed operational performance across the Asia Pacific region. His strategic approach to management focuses on optimizing processes and improving team performance, enabling organizations to succeed in competitive markets. Thanks to its extensive experience, Maksym has developed a reputation for fostering collaboration and innovation, making it a valuable asset in any operational environment.