Bitcoin continues to beat its highest price ever, preventing more countries from adopting Bitcoin. The country is increasingly considering acquiring Bitcoin as part of its national strategic preparation, just as Gold does.
In 2021, El Salvador became the world’s first country to officially adopt Bitcoin as its fiat currency and integrate it into a national reserve. Under President Nayib Bukele’s leadership, the country is currently investing regularly with a $6,189 Bitcoin holding at the time of writing worth more than $611 million. El Salvador sees Bitcoin as a tool to reduce dependence on the US dollar, promote financial inclusion, and attract crypto-focused tourism and businesses. The average acquisition cost means $44,000 at its current price, and investments have already increased by 139%. Additionally, the government has launched initiatives such as Bitcoin-backed “volcanic bonds” to fund infrastructure projects and renewable energy investments.
Following the El Salvador lead, other developing countries are exploring Bitcoin adoption. For example, Argentina, which is tackling high inflation, has seen political leaders propose Bitcoin integration as a solution to economic instability. In the Pacific, small countries like Tonga are debating the adoption of Bitcoin to enhance their economy through remittance savings and decentralized finances. Bhutan employs a different strategy by directly mining Bitcoin. Earlier this year, it was revealed that a lesser-known South Asian country mined bitcoin from hydroelectric power generation, generating around 55-75 BTC ($3.6-$4.8m) per week . Bhutan Bitcoin Holdings is being held through Druk Holdings, and on-chain data has begun to dabble with Bitcoin in 2019, and has been accelerating since 2020. It is estimated that the country has mined more than 27,727 Bitcoin over time ($1.3 billion). In November, it was reported that Bhutan had won 367 Bitcoin, worth $33.5 million, with a new ATH of $90,000. The country also cashes when Bitcoin has reached 70,000 and has so far cashed out $100 million, and still holds around $1.1 billion of 12,206 Bitcoin.
Reports show that several countries in the Middle East have already purchased Bitcoin as a national reserve, but may not have publicly announced it yet. In Europe, various countries hold Bitcoin, but their philosophy of dealing with it is different. For example, Germany decided to sell 50,000 bitcoin between June and July, generating $2.8 billion in revenue. At this point, they would have had more than $5 billion in Bitcoin profits if they kept it down. Bitcoin was seized from a “Movie 2k” criminal case.
The actions of the German government were under criticism. Christian Lindner, a former German finance minister, criticizes the government for not incorporating Bitcoin into the country’s financial strategy. He cites recent developments in the United States under President Donald Trump, a pro-bitcoin.
Speaking to the US, the country is poised to make the biggest U-turns when it comes to Bitcoin. Donald Trump has pledged to support Bitcoin and crypto in general by making the US a friendly crypto nation. Already, U.S. Senator Ramins has a bill that forces the Federal Reserve to use some of the gold reserves to purchase one million units of Bitcoin. If the bill sees the light of day, the move aims to hold Bitcoin for 20 years and use profits to reduce national debt. Currently, the US holds around 207,000 bitcoins, making it the top holder ahead of China at 194,000.
It is important to note that most of these holdings are from Bitcoin seized from criminal activity. Only El Salvador and Bhutan have publicly announced that they have purchased Bitcoin either through mining or direct purchases.
Roads from 2025 onwards
It is too early to draw a conclusion as a national strategic preparation regarding Bitcoin, but the current positive returns from countries such as El Salvador and Bhutan are persuasive. Smaller countries seem to have a greater advantage to testing Bitcoin Reserve Strategy. Bitcoin can quickly become a geopolitical issue. Representatives of the Russian parliament called on the government to adopt Bitcoin as a strategic preparation for inflation, a threat to Russia’s financial stability, as well as sanctions. Trump also said last week that the US should seek leadership in the crypto space ahead of China, so that it doesn’t allow China to decide rules.
The advantage appears to be higher than the potential drawbacks of missing everything. With Donald Trump being sworn in on January 20, 2025, it is clear what the US will take regarding crypto regulations and adoption. Powell, chairman of the US Federal Reserve, called Bitcoin a gold competitor. Soon, it may even be very expensive for other small countries to hold a considerable amount of Bitcoin reserves. Already, companies like MicroStrategy, BlackRock and Mara Digital Holdings have accumulated bitcoin and held a substantial amount. Bitcoin’s path as digital gold looks even more promising if more companies are adopting similar strategies.
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