Cathie Wood, the founder and CEO of ARKInvest, predicted that the GDP of El Salvador could potentially increase by 1000% by 2029. In an interview with other industry experts and the President of El Salvador, Nayib Bukele, Wood mentioned in a tweet that by leveraging artificial intelligence and Bitcoin to drive economic and educational reforms, the president has the potential to increase El Salvador’s GDP tenfold during his next five years in office.
Cathie Wood, Laffer Center, Max Keiser & Stacy, President Nayib Bukele in El Salvador (Source: Twitter)
ArkInvest’s CEO maintains,
Harnessing Bitcoin and AI to turbocharge his economic and education reforms, the President could scale El Salvador’s GDP 10-fold during his next 5-year term.
El Salvador opts For a Crypto-Friendly Stance
El Salvador’s government officially recognized Bitcoin as legal tender on June 9th, 2021, by publishing the relevant legislation in the official gazette. The law came into effect on September 7, 2021. This made El Salvador the first country to formally adopt Bitcoin as a legal form of payment. This marks a significant step towards broader acceptance of Bitcoin and digital assets worldwide.
El Salvador’s friendly outlook and acceptance of Bitcoin are likely to help the country avoid currency devaluation and maintain a stable economy.
Meanwhile, the Central American country has mined approximately 474 Bitcoins since 2021, thanks to a geothermal power plant powered by a volcano, as recently reported by Reuters. At current prices, this has increased the government’s overall bitcoin portfolio to around $354 million.
The government holds 5,750 bitcoins in its coffers, according to the nation’s “Bitcoin Office,” an official government body. This was promoted as an environmentally friendly method of accumulating the popular cryptocurrency, which is not regulated by any central bank.
El Salvador Faces Debt Crises
The nation’s public debt reached a 30-year high of $25 billion in 2022. Following the collapse of initial negotiations for a billion-dollar contract with the IMF earlier in his first term, Bukele’s administration has returned to the negotiating table, even hiring the former Western Hemisphere head of the IMF.
Even though credit agencies are warning that state coffers are running dangerously low, Bukele is pushing on with his plan to turn the nation into a cryptocurrency haven, harming the nation’s chances of receiving a swift cash infusion from the International Monetary Fund (IMF).
Due to growing support from regulators in the country to legalize the use of digital assets and their potential benefits for financial inclusion, El Salvador is expected to heavily rely on virtual assets for GDP growth. This move is predicted to have a positive impact, with Cathie Wood forecasting a tenfold increase in GDP during the next 5 years.
