El Salvador has firmly established itself as a global leader in the adoption of Bitcoin (BTC), according to Max Keiser, a renowned Bitcoin expert and advisor to President Nayib Bukele. In a recent interview with Diario El Salvador, Keiser outlined the five stages of Bitcoin adoption and explained how El Salvador has progressed to the fourth stage, positioning itself as a beacon of innovation in the digital currency space.
Keiser’s framework for Bitcoin adoption includes the following stages:
- Discovery: Learning about Bitcoin.
- Opportunism: Recognizing Bitcoin’s potential, but still preferring local currencies.
- Payment Channel: Bitcoin used as an alternative payment system.
- Store of Value: Bitcoin recognized as a reliable store of wealth.
- Hyperbitcoinization: Bitcoin becomes the primary unit of account in a circular economy.
El Salvador’s Position: A Store of Value
Under President Bukele’s leadership, El Salvador is currently at the fourth stage—store of value—where Bitcoin is seen not only as a payment method but also as a way to protect wealth from inflation and volatility. This shift in perception marks a crucial evolution in how Bitcoin is integrated into the country’s economy.
Since 2022, El Salvador has maintained a strategic Bitcoin reserve, holding 6,048 BTC, which has yielded significant returns, with an unrealized gain of over $300 million, according to the National Bitcoin Office (ONBTC). Keiser highlighted that if the country maintains its position at this stage, it will remain a global leader in Bitcoin adoption.
Bitcoin Beach: A Step Towards Hyperbitcoinization
Keiser also pointed to the unique experiences of Bitcoin Beach in El Zonte and Bitcoin Berlin in Usulután, which he believes have already entered the fifth stage—hyperbitcoinization. In these communities, Bitcoin is not just a medium for transactions but the main unit of account, creating a local circular economy driven by digital currency.
Global Comparison: US and Silicon Valley
Keiser’s analysis also compared Bitcoin adoption across other countries, noting that U.S. President Donald Trump and some members of Silicon Valley are still at earlier stages. While Trump acknowledges Bitcoin, it is not yet central to his strategy. Some tech elites in Silicon Valley have embraced Bitcoin as a payment method but have yet to recognize its potential as a store of value, a key advancement already achieved in El Salvador.
The Path Forward for El Salvador
For El Salvador, Keiser emphasized the importance of not regressing to earlier stages, where Bitcoin is used only for payments. He stressed that continuing to treat Bitcoin as a store of value will position El Salvador at the forefront of Bitcoin adoption globally. Keiser believes that the country’s success could inspire others to adopt Bitcoin not just as a tool for payments but as a foundation for building more equitable, decentralized economies.
El Salvador’s journey towards hyperbitcoinization is well underway, and with consistent policy and commitment to Bitcoin, it could serve as a model for the future of global finance.