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El Salvador has discovered an enormous amount of gold, with an estimated value of an impressive 3 trillion USD, hidden in the ground.
As the first country to officially adopt Bitcoin (BTC) as legal tender – under the leadership of staunch Bitcoin maximalist Nayib Bukele – the question is whether the country will use this gold to expand its Bitcoin holdings.
Potential of gold exploration
Bukele has stated that only 4% of potential mining areas in El Salvador have been mapped so far. This limited exploration has already led to the discovery of about 50 million ounces of gold (about 1.41 million kg), with an estimated value of 131 billion USD. This amount represents 380% of the country’s gross domestic product (GDP). The president predicts that a full exploration of the gold reserves could reveal a potential value of over 3 trillion USD, equivalent to an impressive 8,800% of El Salvador’s GDP.
Resumption of mining activities
A key question is whether El Salvador will use its gold reserves to boost its economy. Bukele has proposed lifting the ban on metal mining that was introduced in 2017. That ban was imposed at the time because of significant environmental damage caused by mining, including water pollution, deforestation and loss of biodiversity. But the president stresses that responsible mining could be key to achieving economic benefits while minimizing environmental impact.
From Gold to Bitcoin?
Max Keiser, a lawyer and well-known Bitcoin maximalist, advocates monetizing El Salvador’s gold reserves and investing the proceeds in Bitcoin. Keiser believes this is a smart strategy, as he is convinced that Bitcoin will create more value than gold in the long run.
Criticism and Skepticism
Not everyone shares this optimism. Some experts doubt whether El Salvador’s gold reserves are actually as large as claimed. Moreover, such enormous amounts of gold could flood the market and lower the actual value of gold. Despite these criticisms, the combination of gold and Bitcoin puts El Salvador in a unique position that could have a significant impact on the country’s future.
- El Salvador discovers enormous gold reserves worth 3 trillion USD – a new opportunity for Bitcoin? - December 12, 2024
- Alex Krüger: Bitcoin is in a “super cycle” - December 12, 2024
- New inflation data released: What does this mean for the economy and cryptocurrencies? - December 12, 2024
