El Salvador DCAs Over $500M BTC

El Salvador’s president, Nayib Bukele, and his government has been purchasing 1 BTC per day since 18 November 2022, with the intention to continue until the purchase is “no longer possible using fiat currencies”. Just over two years on, the El Salvador government has acquired 5,956 BTC in total, worth more than $583M at current valuation. 

This purchasing strategy is a textbook example of Dollar Cost Averaging (DCA), but applied on a sovereign level. By committing to buy a fixed amount of Bitcoin daily regardless of market conditions, the government mitigates the risk of buying at a local top. Instead of trying to time the market—a notoriously difficult task even for professional traders—this disciplined accumulation allows the nation to smooth out its average entry price over time, turning short-term volatility into a long-term accumulation opportunity.

In June 2021, El Salvador, under the leadership of Bukele, passed the Bitcoin Law, which accepts the cryptocurrency as legal tender. They are also the first country to do so and remain the one of two countries in the world to have done so. While the decision has come under heavy criticism due to the environmental impact of Bitcoin mining as well as the volatility of the asset, the plan seems to have paid off well with the country’s holdings in profit of over $330M or 123.67%,  as of 5 December, on a cost basis of $270M, according to a screenshot posted by Nayib Bukele on X.

Furthermore, Bukele’s comment about buying until it is "no longer possible" alludes to the economic theory of "hyperbitcoinization." This concept suggests a future scenario where Bitcoin supplants fiat currencies as the dominant global store of value. Proponents of this view argue that as traditional currencies are devalued by inflation and monetary expansion, their purchasing power against a mathematically scarce asset like Bitcoin will eventually erode, making the digital currency the preferred standard for global commerce.