Vaneck Celebrates Bukele's Bitcoin Gambit and His Vision for El Salvador

Vaneck, one of the largest asset managers in the U.S., has commended President Nayib Bukele's work in making El Salvador a better place

One of the largest investment funds in the U.S. has highlighted the benefits that El Salvador has experienced since President Bukele arrived in office and adopted a bitcoin strategy. Now, the fund is looking into the country’s vast gold mining potential, which is currently blocked by law.

El Salvador adopted bitcoin as legal tender in September 2021, and ever since then, the country has been in the spotlight. While some critics slammed the move, others have praised President Nayib Bukele’s work in making El Salvador a better place. Now, one of the largest asset managers in the U.S. has commended the president’s vision and highlighted some of the gains the country has had.

Matthew Sigel, Head of Digital Assets Research at Vaneck, qualified El Salvador’s turnaround following Bukele’s vision as Latin America’s ultimate comeback story. In a recently released report, Vaneck confirms that Bukele’s actions have improved the Salvadoran citizens’ quality of life and personal security.

“El Salvador is Latin America’s ultimate comeback story. President Bukele arrived in office in 2019 and quickly began to turn the country around, improving the quality of life for Salvadorans and making the nation safer,” Sigel stated.

The report also highlights El Salvador’s bitcoin adoption, which Sigel says is slowly being integrated into the daily lives of Salvadorans. While only 8% of the population has used bitcoin for payments, the researcher highlights that the integration of the cryptocurrency is setting the stage for broader acceptance and innovation in financial technology.

“Bitcoin adoption has been slower than anticipated. Only 8% of Salvadorans have used bitcoin to make payments. Yet the integration of Bitcoin into daily life is creating a foundation for broader acceptance and innovation in financial technology,” the report adds.

El Salvador’s bitcoin strategy, in addition to growing its reserves, now valued at over $600 million in BTC, includes building the announced Bitcoin City and issuing the so-called Volcano Bonds, which have been delayed several times. However, Sigel notes that this train of action is to be expected, as the government is currently negotiating El Salvador’s debt with the International Monetary Fund (IMF).

“El Salvador’s strategy includes building Bitcoin City, growing its bitcoin reserves (now over $600 mln), and issuing Volcano Bonds. These bonds have been delayed, but that is not surprising, given the government’s negotiations with the IMF,” Sigel explained.

Bukele’s actions in El Salvador are not only limited to bitcoin and personal security. According to Vaneck, the leader is also committed to tapping into the nation’s blocked mining resources. Bukele even invited Vaneck’s geologist to research the numerous gold deposits, described as the world’s “largest per capita and square mile.” These resources are currently blocked from exploitation by law, but Bukele has the political power and the will to reverse the “Law of Metalic Mining Prohibition” enacted in 2017 by the former government.

“Finally, Bukele is also looking to mine El Salvador’s vast gold deposits, which are currently legally blocked. We visited the country in March 2023 and were surprised by the gold potential, which is said to be the world’s largest per capita and square mile,” Sigel added. “The leftist government banned mining in 2017, but Bukele has the political power to reverse this law, and he is eager to do so.”

Sigel concluded his report by stating that he believes Bukele’s bitcoin gambit can serve as a model of innovation, determination, and independence for the emerging world. This, he said, makes El Salvador a contrarian bet and a compelling investment opportunity.