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El Salvador President Nayib Bukele Moves a Significant Amount of Bitcoin to Cold Storage
El Salvador President Nayib Bukele recently made headlines when he revealed that his administration had transferred a substantial portion of the country’s Bitcoin treasury into a cold wallet for safekeeping. The move was part of a plan to securely store the digital assets in a physical vault, as announced on X.
The screenshot shared by Bukele showcased a cold wallet holding 5,689 Bitcoin, valued at $406 million at the time the screenshot was taken. This indicated that the Bitcoin price was around $71,463 at the time of the transfer, aligning with the wallet’s first transaction on Tuesday, March 12.
Previously, El Salvador was reported to hold 2,848 Bitcoin, valued at $173 million, as noted in a previous report by Decrypt. Bukele has been actively involved in discussions regarding BTC price movements since the country declared Bitcoin as legal tender in 2021. Notable initiatives include establishing a Bitcoin mining operation harnessing geothermal energy from a volcano and offering Bitcoin “volcano bonds.”
Bitcoin Transfer and Escalating Holdings
On social media platform X, Bukele disclosed the decision to relocate a significant portion of the country’s Bitcoin into cold storage within a physical vault within El Salvador’s territory. This move marked the establishment of El Salvador’s first Bitcoin piggy bank, a term playfully used by Bukele to highlight the prudent management of digital assets.
The bulk of the Bitcoin transfer, approximately 4,568 BTC, originated from crypto exchange Bitfinex based on blockchain data. The most recent transaction involved the transfer of 4,007 BTC from a Bitfinex exchange address to El Salvador’s cold storage wallet. As of the latest update, the treasury wallet holds 5,689.7 BTC, equivalent to approximately $415 million.
Challenges and Market Impact
One of the challenges encountered post-Bitcoin adoption as legal tender in El Salvador is the management of fluctuating transaction fees. When Bitcoin Ordinals experienced a surge in popularity akin to NFTs in May 2023, network fees exceeded $30 per transaction, impacting users like Marce Romero from El Salvador who highlighted the escalating costs.
In the wake of Grayscale’s $400 million BTC sell-off to Coinbase, the Bitcoin price dipped by 8%, currently standing at $67,934. This move created downward pressure on the market, with the firm’s Grayscale Bitcoin Trust (GBTC) opting to sell Bitcoin to support ETF operations after investor redemptions. Despite market fluctuations, El Salvador’s Bitcoin reserves continue to grow steadily, underpinning the country’s commitment to digital assets.
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