Latam Insights Encore: El Salvador’s $3 Trillion Gold Stash Will Be Catalyst for a Bitcoin-Centric Future
Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and cryptocurrency news from last week. This edition examines how El Salvador might leverage its newfound gold reserves to increase its bitcoin stash, becoming richer in just one trade.
Latam Insights Encore: El Salvador Might Follow Michael Saylor’s Playbook, Using Gold to Purchase Bitcoin
The recent disclosure of a humongous reserve of gold in El Salvador and the possibility of it being exploited have awakened all sorts of opportunities for the country, that needs this kind of funds to spearhead a larger economic recovery.
The underground gold resource, reported by President Bukele recently, would allow the nation to have a $3 trillion war chest to invest in its development and enlarge the already substantial bitcoin reserve it possesses. Bukele’s statements hint at using this resource to invest more heavily in bitcoin.
Read more: El Salvador Discovers $3 Trillion Gold — Will It All Go Into Bitcoin?
Max Keiser, a cryptocurrency aide of the Bukele administration, talked openly about this possibility, stating that El Salvador could sell convertible shares, a plan following Michael Saylor’s playbook, to finance large-scale bitcoin purchases. For Keiser, bitcoin is now a better asset than gold in the long term.
An action of this kind would upend the global gold market, diluting the value of gold and strengthening the price and the stance of bitcoin as a reserve asset. This comes in line with the recommendation Saylor recently gave for the U.S., stating that it should purchase 25% of the total bitcoin issuance with its gold, diluting the holdings of its enemy nations in the process.
Read more: Michael Saylor Outlines US’s Ultimate Bitcoin Reserve Strategy: Dump Gold, Buy Bitcoin
There are still impediments to exploiting this gold: metal mining activities are illegal in El Salvador, and environmentalist groups are fighting a possible repeal of the law establishing these provisions. However, Bukele has the political power to repel this law and extract this gold in the most environmentally friendly way.
If this gold is finally exploited, El Salvador should decide to invest at least part of these funds to become one of the largest holders of bitcoin in the world and to disrupt the global gold market, all in one swift trade.
