El Salvador’s audacious plan to embrace Bitcoin and artificial intelligence (AI) as economic cornerstones has a powerful advocate in ARK Invest CEO Cathie Wood. Following a meeting with President Nayib Bukele on May 28th, Wood emerged bullish, predicting a tenfold increase in El Salvador’s GDP within five years.
A Vision of Explosive Growth (From $32 Billion to $300 Billion?)
Wood believes El Salvador’s real GDP could skyrocket from $32.4 billion in 2022 to a staggering $300 billion by 2029. This ambitious forecast hinges on Bukele’s strategy to leverage Bitcoin and AI as catalysts for economic and technological transformation. Details of the plan, including Bitcoin integration into capital markets, AI implementation, and tax policies, were reportedly discussed during the meeting.
The Numbers Game
Max Keiser, a Bitcoin advisor to Bukele, revealed that Wood presented a roadmap for achieving the projected tenfold GDP growth. El Salvador has already seen some economic progress under Bukele. Since taking office, he’s overseen a 30% GDP increase. Reaching the lofty $300 billion target would place El Salvador in the economic league of developed nations like Romania and Chile.
Bukele’s economic reforms have been bold. El Salvador has made Bitcoin legal tender, slashed taxes on tech ventures, and eliminated income taxes for foreign investments and remittances. The country further solidified its tech ambitions with a $500 million strategic partnership with Google in April 2024.
The Bitcoin Adoption Struggles
Despite El Salvador’s Bitcoin gamble, challenges persist. A significant portion of the population lacks the technical know-how to utilize cryptocurrency. Additionally, merchant acceptance of Bitcoin has been inconsistent, and the rollout of the government’s Chivo Wallet faced issues. Surveys indicate a decline in Bitcoin usage for everyday purchases, with only 12% of Salvadorans adopting it in 2023.
Also Read: Bitcoin Nation Takes Flight: El Salvador Launches First Tokenized Security for New Hotel (HILSV)
Recent developments offer a glimmer of hope. A surge in Bitcoin’s price has reportedly spurred renewed merchant adoption. Major brands like Walmart, Starbucks, and Dominos are now accepting the cryptocurrency, potentially boosting its daily use.
The Verdict: A Bold Experiment with Uncertain Outcome
Cathie Wood’s bold prediction has reignited interest in El Salvador’s unorthodox economic experiment. The coming years will reveal whether the Central American nation can translate its Bitcoin and AI vision into a tenfold economic boom, or if the gamble will ultimately fizzle out.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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