El Salvador’s Bitcoin and AI Adoption Plans Could 10x GDP by 2029

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Harvey Hunter

Junior Content Creator

Harvey Hunter

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Harvey Hunter is a Junior Content Creator at Cryptonews.com. With a background in Computer Science, IT, and Mathematics, he seamlessly transitioned from tech geek to crypto journalist.

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May 29, 2024 12:02 EDT

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ARK Invest CEO Cathie Wood believes El Salvador’s Bitcoin and AI adoption plan could see its GDP tenfold in the next 5 years.

In an X thread, Cathie Wood praised El Salvador’s transitions into an “oasis” for Bitcoin and AI adoption under Nayib Bukele’s presidency.

“President Bukele’s determination to turn El Salvador into an oasis for the bitcoin and AI communities – two of the biggest economic and technology revolutions in history – is the reason I believe that its real GDP could scale 10-fold during the next five years,” she stated.

This came following a meeting between the president, Cathie Wood, Bitcoin advocate Stacy Herbert, United States economist Arthur Laffer, and ARK Invest research associate Marc Seal to discuss potential Bitcoin and AI opportunities in El Salvador.

Wood and Bukele discussed Bitcoin’s integration into capital markets, AI, and tax policies.

Wood highlighted the potential for El Salvador’s economy to thrive under these initiatives, suggesting “its real GDP could increase tenfold over the next five years,” citing supporting statistics.

.@CathieDWood walked us through the numbers.

I’m a believer.

I have a very high degree of confidence that @ARKInvest’s numbers for #ElSalvador’s GDP going from $30 to $300 billion over the next 5 yrs (a 10x) are spot on.

Have you booked your flight? https://t.co/AiRLSrUnfW

— Max Keiser (@maxkeiser) May 29, 2024

El Salvador Thriving With Crypto

During Bukele’s presidential run, El Salvador made Bitcoin legal tender, eliminated taxes related to tech innovation, and removed income tax for foreign investments and remittances in March.

El Salvador has also adopted cryptocurrency as the core of its financial system, holding 5,764 Bitcoin in its treasury. The value of these holdings is $396.2 million, reflecting a 58.6% increase over the average purchase price.

These initiatives have turned El Salvador into a hub for cryptocurrency and innovation, drawing attention from investors and international corporations. In April 2024, Google expanded into the country through a $500 million strategic partnership.

Consequently, El Salvador has seen unprecedented economic growth. According to World Bank data, its GDP was $32.4 billion in 2022, up over 30% since Bukele first took office in June 2019.

With these further initiatives to increase Bitcoin and AI adoption, a 10-fold increase in the country’s GDP could see it reach $300 billion. It would put the Central American country’s GDP roughly on par with Romania, the Czech Republic, and Chile.

This prospect is made even more likely by rising interest in AI-related cryptocurrency, which surged 257% in the early months of this year. Popular AI Crypto projects are providing real-world utility and present an undeniable opportunity.

Civilian Bitcoin Adoption is Struggling

Although El Salvador has seen massive institutional adoption, Bitcoin adoption among the local population arguably hasn’t been as successful.

In 2023, only 12% of the local population used Bitcoin at least once to pay for goods and services, down from 2022.

A largely tech-illiterate population, lack of merchant enforcement, and issues with the rollout of El Salvador’s Chivo Wallet in 2021 have slowed the progress of its adoption.

Merchants have been resistant due to a lack of customer demand to pay in Bitcoin. This is likely due to volatility concerns since the Bitcoin price fell from its all-time high of $69,000 to as low as $15,600 in early 2023.

The government of El Salvador has been bolstering its efforts to increase crypto investment within the nation, however.

In December 2023, it was reported that the country had initiated a fresh citizenship-by-investment initiative. The process would grant residency visas and citizenship to individuals who invest $1 million in Bitcoin or Tether within the nation.