El Salvador Bitcoin Treasury Is a Lot Bigger Than We Thought

El Salvador President Nayib Bukele posted a not at all subtle flex on X yesterday, saying his administration moved a "big chunk" of its Bitcoin treasury into a cold wallet and planned to lock it away in a vault.

The screenshot he shared showed that the wallet had 5,689 Bitcoin in it—worth $406 million when he took the screenshot. That means the Bitcoin price would have been approximately $71,463 when Bukele moved the funds, which lines up with when the wallet made its first transaction on Tuesday, March 12.

El Salvador was previously believed to be holding 2,848 Bitcoin, worth $173 million when Decrypt last wrote about the country's holdings in late February. Bukele has often made public remarks on the BTC price since making it legal tender in 2021, starting up a Bitcoin mining operation using geothermal energy from a volcano, and offering Bitcoin "volcano bonds."

In February he was reelected as president, securing another 5-year term. But that's not to say there hasn't been friction along the way. The International Monetary Fund has been in a prolonged spat with El Salvador, after it recommended that the country undo its decision to make Bitcoin legal tender. And U.S. lawmakers have said several times they think Bitcoin adoption in El Salvador could pose a threat to Americans.

The embrace of Bitcoin as legal tender has also introduced the challenge of dealing with unpredictable fees. When Bitcoin Ordinals, media on the Bitcoin network that's similar to NFTs, had a sudden surge in popularity in May 2023, it sent network fees soaring to more than $30 per transaction.

One El Salvadoran, Marce Romero, said on X at the time that a $100 transaction in El Salvador cost over $20 to complete, adding that those using the network for "fkn jpegs" (referring to NFTs) should think twice—insinuating that there are more important use cases for using Bitcoin.

The vast majority of the BTC now in El Salvador's cold wallet—approximately 4,568 BTC—is being sent from crypto exchange Bitfinex, according to blockchain data. Most of it arrived in the most recent transaction last night, when the cold storage wallet received 4,007 BTC from a Bitfinex exchange address.

At the time of writing, the Bitcoin price is $67,934 after having dropped by 8% in the past day.

That's because last night Grayscale moved $400 million worth of BTC to Coinbase to sell, creating enough downward pressure to send Bitcoin below $69,000. The way the firm's Grayscale Bitcoin Trust (GBTC) spot Bitcoin ETF works, the firm sells Bitcoin backing ETF shares after investors redeem them.

But the El Salvador treasury wallet has been steadily receiving more Bitcoin since Bukele took the screenshot. As of the time of writing on early Friday morning, the wallet has 5,689.7 BTC worth about $415 million.

"You can call it our first Bitcoin piggy bank," Bukele quipped yesterday on X. "It's not much, but it's honest work."