What if El Salvador had bought Ethereum over Bitcoin?

El Salvador — a 21.041 km² republic in Central America — made history by being the first country to officially adopt Bitcoin (BTC) as a legal tender currency in 2021.

On September 6 of the same year, Nayib Bukele, president of El Salvador, announced the Salvadoran treasury bought 400 BTC at an average price of $46,811.00. Following that, there were nine new purchase announcements on different days, until June 30, 2022 — all done on Bukele’s official Twitter (X) account.

Besides Nayib Bukele’s own statements, there is no evidence that the country has ever bought one single Bitcoin, but — for this report — we are assuming that all his words are truthful and accurate.

With a total investment of around $103.23 million for 2,381 BTC (at an average price of $43,357.14/btc), the country’s wallet is now down around $33 million (-32%), considering Bitcoin’s spot price of $29,400, by press time.

Bitcoin is the leading cryptocurrency by market cap, highly promoted as ‘sound money’; followed by Ethereum (ETH), promoted as ‘ultra-sound money’.

This makes Finbold wonder: What if El Salvador had bought Ethereum over Bitcoin?

What if El Salvador had bought Ethereum?

According to data collected by Finbold’s team — considering only the purchases from September 6, 2021 to June 30, 2022 — Nayib Bukele made the least worse investment decision with BTC than with ETH.

If El Salvador had used the same amount in US Dollars to buy Ethereum, on each of the same days Bukele announced the Bitcoin’s purchases, according to historical price data by Coingecko, the country would be losing $15 million more than the current losses.

These investments would now be worth around $55.60 million, holding 30,053.12 ETH, for a 46.14% loss.

If El Salvador had staked all these Ethereum’s on July 1, 2022, considering an average yield of 3.29% annually, the country’s treasury would have earned around $1.83 million by now, still worse than by simply holding Bitcoin.

Bitcoin daily purchases by El Salvador

On November 17, 2022, the president once again talked about Bitcoin purchases, declaring that he would be buying 1 BTC per day starting on November 18 within El Salvador’s treasury. Since then, there have been no related updates made publicly, which keeps the promise alive.

Finbold also collected historical price data from Coingecko for a raw simulation on the possible outcome if (A) Nayib Bukele kept his promises of buying 1 BTC per day since November 18, 2022; and (B) El Salvador had made daily ETH purchases with the same amount in USD.

There would have been a total of 267 Bitcoin purchases, at an average price of $24,692.13 per BTC, resulting in a current position of $7.85 million, profiting around $1.25 million (+19.07%) for these 267 days only. This would have reduced El Salvador’s total losses to around $31.85 million.

The daily performance for Ethereum purchases would also have been worse than Bitcoin’s. Sitting in a current amount of around $7.27 million, for an estimated profit of $0.67 million (+10.38%), making a meaningless impact on the bigger outcome.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.