Benzinga - by Murtuza Merchant, Benzinga Staff Writer.
ARK Invest CEO Cathie Wood said El Salvador’s economy could grow dramatically if it continues to embrace Bitcoin (CRYPTO: BTC) and artificial intelligence (AI) under President Nayib Bukele‘s leadership.
What Happened: "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," Wood stated in a May 28 post on X after meeting with Bukele.
During their discussion, Wood and Bukele focused on integrating Bitcoin into capital markets, the implications of AI, and potential tax policy reforms.
Max Keiser, an advisor to Bukele on Bitcoin matters, noted that Wood provided detailed projections on how El Salvador’s GDP could rise to $300 billion by 2029.
Key figures in the meeting included Bitcoin advocate Stacy Herbet, U.S. economist Arthur Laffer, and ARK Invest research associate Marc Seal.
Since President Bukele took office in June 2019, El Salvador’s GDP has grown to $32.4 billion in 2022, reflecting an increase of over 30%, according to World Bank data.
Achieving a GDP of $300 billion would place El Salvador on par with nations like Romania, the Czech Republic and Chile.
Under Bukele's administration, El Salvador has made several bold moves to promote economic growth, including making Bitcoin legal tender, eliminating taxes on tech innovations and removing income tax for foreign investments and remittances as of March.
Further bolstering its tech landscape, Google expanded into El Salvador with a $500 million strategic partnership in April 2024.
The country currently holds 5,764 bitcoin in its treasury, valued at $396.2 million, which represents a 58.6% increase from its average purchase price.
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Why It Matters: However, Bitcoin adoption among El Salvador’s local population has faced challenges.
Issues such as a largely tech-illiterate populace, inconsistent merchant enforcement, and a problematic rollout of the Chivo Wallet in 2021 have hindered progress.
According to Jamie Robinson, chief strategy officer of The Bitcoin Hardware Store, only 12% of the local population used Bitcoin for transactions in 2023, down from the previous year.
Despite these hurdles, there has been a resurgence in merchant adoption of Bitcoin, spurred by its rising price in early 2023.
Major retailers like Walmart, Starbucks and Domino‘s have led this renewed wave of adoption.
What’s Next: These developments and their broader implications for the future of digital assets will be key topics of discussion at Benzinga’s Future of Digital Assets event on Nov. 19.
Industry leaders will convene to explore the latest trends and future directions in the digital asset space, providing valuable insights into the evolving landscape.
Read Next: ‘Scared Of Biden Staying?’ 33% Of Voters Will Consider Candidate’s Crypto Stance In 2024, Survey Says
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