El Salvador's Ambitious Bitcoin and AI Plans Could 10x Its GDP by 2029, Predicts Cathie Wood

 

Cathie Wood, CEO of ARK Invest, has made a bold prediction that El Salvador’s gross domestic product (GDP) could increase tenfold over the next five years if the country continues its current trajectory of adopting Bitcoin and artificial intelligence (AI) under the leadership of President Nayib Bukele.

“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 recent social media post.

The Vision for a $300 Billion Economy

Wood elaborated on how El Salvador could achieve the ambitious goal of increasing its GDP to $300 billion by 2029. Currently, El Salvador's GDP is approximately $30 billion, with an average income of only $450 per month. Wood noted that President Bukele understands the Laffer Curve, which suggests that lower taxes can lead to greater economic growth. Art Laffer, a U.S. economist known for his work on the Laffer Curve, sees multiple ways to build on the momentum created by Bukele's tax incentives.

Strategic Meetings and Economic Projections

Wood’s predictions followed her meeting with President Bukele and his team, including Bitcoin advocate Stacy Herbert, economist Arthur Laffer, ARK Invest research associate Marc Seal, and Max Keiser, an advisor to Bukele on Bitcoin matters. During the meeting, Wood reportedly discussed the integration of Bitcoin into capital markets, the potential of AI, and favorable tax policies.

Keiser shared on social media, “Cathie Wood walked us through the numbers,” highlighting the detailed economic projections discussed during their session with Bukele.

Economic Growth and Bitcoin Adoption

El Salvador's GDP was $32.4 billion in 2022, marking a 30% increase since Bukele took office in June 2019, according to World Bank data. If the GDP reaches $300 billion, it would position El Salvador’s economy on par with nations like Romania, the Czech Republic, and Chile.

Under Bukele’s leadership, El Salvador has made significant strides in integrating Bitcoin into its economy, including making Bitcoin legal tender and removing taxes related to tech innovation. In March, the country further incentivized foreign investments and remittances by eliminating income tax on these transactions.

Since 2021, El Salvador has been dollar-cost averaging into Bitcoin, with an average purchase price of $43,097 per BTC. With Bitcoin now trading above $62,000, the country holds an unrealized profit exceeding $57.4 million on its Bitcoin holdings, as reported by the Nayib Bukele Portfolio Tracker website.

Conclusion

Cathie Wood’s optimistic forecast for El Salvador underscores the transformative potential of embracing cutting-edge technologies like Bitcoin and AI. If President Bukele’s vision comes to fruition, El Salvador could become a global leader in financial innovation, significantly boosting its economic standing.