El Salvador’s Bitcoin and AI Adoption Plans Predicted to Boost GDP by 10x by 2029
Renowned investor Cathie Wood, CEO of ARK Invest, has expressed her belief that El Salvador’s ambitious Bitcoin and AI adoption plans could result in a tenfold increase in the country’s GDP within the next five years.
During a meeting with El Salvador’s President Nayib Bukele, Bitcoin advocate Stacy Herbert, United States economist Arthur Laffer, and ARK Invest research associate Marc Seal, Wood praised the country’s commitment to becoming a hub for Bitcoin and AI communities, referring to them as the “biggest economic and technology revolutions in history.” She confidently stated, “President Bukele’s determination is the reason I believe that its real GDP could scale 10-fold during the next five years.”
The discussions between Wood and Bukele centered around the integration of Bitcoin into capital markets, AI advancements, and tax policies. Wood emphasized the potential for El Salvador’s economy to flourish under these initiatives, citing supporting statistics and suggesting that the country’s real GDP could increase tenfold within the next five years.
El Salvador has already made significant strides in the crypto space. In addition to making Bitcoin legal tender, the country has eliminated taxes related to tech innovation and removed income tax for foreign investments and remittances. The government also holds 5,764 Bitcoin in its treasury, with a value of $396.2 million, reflecting a substantial increase since its initial purchase.
These initiatives have positioned El Salvador as a cryptocurrency and innovation hub, attracting attention from investors and international corporations. In a strategic partnership, Google recently invested $500 million in the country, further solidifying its status as an attractive destination for business.
As a result of these developments, El Salvador has experienced unprecedented economic growth. According to World Bank data, the country’s GDP reached $32.4 billion in 2022, marking a remarkable increase of over 30% since President Bukele assumed office in June 2019.
By further promoting Bitcoin and AI adoption, El Salvador aims to achieve a tenfold increase in its GDP, potentially reaching $300 billion. This would position the Central American nation on par with countries like Romania, the Czech Republic, and Chile.
The rising interest in AI-related cryptocurrencies further supports the likelihood of this economic growth. AI crypto projects have seen a surge of 257% in value during the early months of this year, offering tangible real-world utility and undeniable investment opportunities.
However, while institutional adoption of Bitcoin has been substantial, civilian adoption within El Salvador has faced challenges. In 2023, only 12% of the local population used Bitcoin for transactions, a decrease from the previous year. Factors such as a largely tech-illiterate population, lack of merchant enforcement, and issues with the rollout of El Salvador’s Chivo Wallet in 2021 have hindered widespread adoption.
To address this, the government has been actively working to increase crypto investment within the country. In December 2023, El Salvador introduced a citizenship-by-investment initiative, offering residency visas and citizenship to individuals who invest $1 million in Bitcoin or Tether within the nation.
Despite these challenges, El Salvador remains committed to its Bitcoin and AI adoption plans, with the potential for significant economic growth in the coming years.