El Salvador Mines Nearly 474 BTC in Three Years

Since 2021, El Salvador has mined 473.5 BTC, valued at approximately $29 million, at a state-run geothermal power plant harnessing volcanic energy, according to Reuters.

The country’s national Bitcoin office announced the launch of its own space in the Bitcoin mempool, allowing real-time tracking of the cryptocurrency balance in the state treasury. At the time of writing, the government holds ~5748 BTC, valued at $352.3 million.

El Salvador now has its own @mempool space where anyone can check out our #bitcoin treasury holdings.

See details in the next post. pic.twitter.com/PEpVemHoFO

— The Bitcoin Office (@bitcoinofficesv) May 12, 2024

El Salvador began test mining Bitcoin in October 2021, roughly a month after the law recognizing the first cryptocurrency as legal tender came into effect.

In June 2023, authorities announced the Volcano Energy project with a capacity of 241 MW, aimed at using renewable energy sources for mining digital gold.

The total cost of the enterprise was stated to be $1 billion, with the state holding a 23% stake. Tether, the company issuing the USDT stablecoin, announced its participation in the first $250 million funding round for Volcano Energy, though it did not disclose its share.

According to Reuters, all Bitcoins mined by El Salvador were generated at a small 102 MW geothermal power plant located near the Tecapa volcano. To power 300 mining rigs, 1.5 MW is utilized.

Based on the use of the popular Antminer S19 series devices in recent years, the estimated hash rate of the facility is 0.042 EH/s. For comparison, the largest American public miner, Marathon Digital, had 29.9 EH/s at the end of April 2024.

In October 2023, El Salvador announced the launch of its own mining pool, Lava Pool.

El Salvador Continues Its Bitcoin Strategy

In February 2024, the country’s presidential election saw the victory of incumbent President Nayib Bukele, the main proponent of adopting the first cryptocurrency. Before his re-election, he promised to maintain the existing Bitcoin strategy.

Amid the rise of digital gold’s price above $60,000, Bukele reported that El Salvador’s “paper” profit from investments in the asset amounted to 40% or about $41.6 million.

He clarified that the figure was calculated solely based on “market purchases,” while the total volume of reserves is also formed from other sources such as mining or “Bitcoin freedom visas.” Launched at the end of 2023, the initiative allows obtaining residency and a chance for a local passport for investments of $1 million through BTC or USDT. 

In February 2022, the government announced the issuance of the world’s first Bitcoin bonds worth $1 billion. The partner for the project was the platform for trading tokenized securities, Bitfinex Securities, with plans to use the Liquid Network sidechain for placement.

The launch of the bonds was postponed several times, with officials citing “unfavorable conditions” among other reasons.

In January 2023, the parliament passed a law providing a legal framework for issuing digital assets, including bonds based on the first cryptocurrency. In December, El Salvador’s Digital Assets Commission approved the placement of such papers, Volcano Bond, for $1 billion in Q1 2024.

In April 2024, Bitfinex Securities announced the issuance of tokenized debt obligations for the construction of a hotel complex under the Hampton by Hilton brand at El Salvador’s international airport.

According to the description, the five-level infrastructure includes 80 rooms, five commercial spaces, a pool, restaurants, gyms, and other amenities.

The placement of digital bonds on the Liquid Network began on May 15. The maturity period is five years, with investors promised a 5% annual return.

The first capital raise in El Salvador on @Liquid_BTC is now live on @BFXSecurities

And so begins a new era of capital markets for El Salvador.

It is a small, exciting start to many big things to come for us, so stay tuned.

In the meantime, more details on this project ?? pic.twitter.com/weGbno1ZAO

— The Bitcoin Office (@bitcoinofficesv) May 15, 2024

Previously, the government emphasized the role of Bitcoin adoption in helping the country emerge from crisis and boosting tourism.

Critics of El Salvador’s decision to legalize cryptocurrency, including the IMF, acknowledged that the associated risks “did not materialize,” thanks to its “limited” spread.