World's First Bitcoin Sovereign Wealth Fund Launches in El Salvador

El Salvador has officially launched the world's first Bitcoin-denominated sovereign wealth fund, seeded with 5,000 BTC from the country's treasury holdings and ongoing geothermal mining revenue. President Nayib Bukele announced the fund at a ceremony in San Salvador, projecting it will grow to hold over 10,000 BTC within two years.

The fund, managed by a new government entity called the National Bitcoin Office, will invest in Bitcoin-related infrastructure, Lightning Network development, and education programs. A portion of the fund's returns will be directed toward public services.

The announcement comes as El Salvador's earlier Bitcoin gamble appears to be paying off — the country's BTC holdings, purchased at an average price of $40,000, have more than doubled in value. Tourism revenue has also surged, with "Bitcoin Beach" in El Zonte becoming a major destination.

Critics, including the IMF, continue to warn about the risks of sovereign Bitcoin exposure. However, several smaller nations in Latin America and Africa are reportedly studying El Salvador's model for potential adoption.