El Salvador: Is 10X Growth Possible with Bitcoin and Artificial Intelligence?
It is claimed that El Salvador could have the potential to grow its economy tenfold in the next five years if President Nayib Bukele continues with his plan to adopt Bitcoin and artificial intelligence (AI). This claim was made by Cathie Wood, CEO of investment company ARK Invest.
“President Bukele’s determination to make El Salvador a magnet for the Bitcoin and AI communities is one of the biggest reasons why I believe our real GDP can grow 10-fold in the next five years,” Wood said in a statement after his meeting with Bukele on May 28. “someone,” he said. These two areas are considered two of the most important economic and technological revolutions in history.
During the meeting, the integration of Bitcoin into capital markets, the use of artificial intelligence and changes in tax policies were discussed. Max Keizer, who has advised Bukele on Bitcoin, said Wood “gave us the numbers” on how El Salvador could increase its GDP to $300 billion by 2029.
Bitcoin advocate Stacy Herbet, US economist Arthur Laffer and ARK Invest researcher Marc Seal also attended the meeting.
According to World Bank data, El Salvador’s GDP was $32.4 billion in 2022. This figure represents an increase of more than 30% since Bukele took office in June 2019. If the country meets its $300 billion GDP target, it will be economically at a similar level to Romania, the Czech Republic and Chile.
Since Bukele’s first term as president, El Salvador has made Bitcoin its legal currency. It also eliminated related taxes to support technology innovation and zeroed out income tax for foreign investments and remittances from abroad in March.
Google officially started its operations in the country in April 2024 within the scope of a $500 million strategic partnership.
El Salvador currently has 5,764 Bitcoins in its treasury. The value of these Bitcoins is approximately $396.2 million. This figure represents a 58.6% increase over the average purchase price.
However, Bitcoin adoption among the local population is not yet fully realized. In February, Jamie Robinson, chief strategy officer of The Bitcoin Hardware Store, said that the majority of El Salvadoran people are not tech-savvy and that problems with the Chivo Wallet, which was implemented in 2021, were slowing down the use of Bitcoin.
A 2023 study found that only 12% of the local population used Bitcoin to purchase goods and services at least once. This rate is lower than 2022.
However, Robinson added that the Bitcoin price’s rise in early 2023 has ushered in a new wave of Bitcoin adoption among traders in recent months. Large companies such as Walmart, Starbucks and Domino’s are leading this wave.
