El Salvador Buys More Bitcoin Despite Policy Shift

Increasing Bitcoin Reserves

• El Salvador has added 11 more Bitcoin to its national reserve, worth about $1.1 million.
• The country now holds 6,067 BTC, valued at approximately $600 million.
• This purchase comes as Bitcoin rebounds to $100,000 after a recent market dip.

Balancing Bitcoin and IMF Commitments

• The purchase follows El Salvador’s recent agreement with the International Monetary Fund (IMF)* to secure a $1.4 billion loan.
• As part of the deal, the government agreed to:
  • Phase out the Chivo wallet* (a state-backed Bitcoin payment app).
  • Stop accepting Bitcoin for tax payments.
• Despite these restrictions, Bitcoin remains legal tender in the country, and the government continues to grow its holdings.

pic.twitter.com/43pCyvNILP

— Nayib Bukele (@nayibbukele) February 4, 2025

Ties Between El Salvador and the U.S.

• El Salvador’s Bitcoin strategy is accelerating as the country also agrees to accept deported criminals and migrants from the U.S. in exchange for a fee.
• President Nayib Bukele made this announcement after meeting with U.S. Secretary of State Marco Rubio.
• Former President Donald Trump had also spoken with Bukele by phone, fueling speculation about possible cooperation on Bitcoin.
• Following the call on January 23, Bitcoin’s price jumped to $105,000, with traders speculating about U.S.-El Salvador Bitcoin alignment.

We have offered the United States of America the opportunity to outsource part of its prison system.

We are willing to take in only convicted criminals (including convicted U.S. citizens) into our mega-prison (CECOT) in exchange for a fee.

The fee would be relatively low for… pic.twitter.com/HTNwtp35Aq

— Nayib Bukele (@nayibbukele) February 4, 2025

U.S. Exploring Its Own Bitcoin Reserve

• Trump has ordered the formation of a working group to explore a national digital assets stockpile*.
• The initiative, called Strengthening American Leadership in Digital Financial Technology, gives officials 180 days to propose regulatory and legislative actions.
• If approved, this reserve could include Bitcoin confiscated by the U.S. government through law enforcement actions, such as the Silk Road case.

Bitcoin Adoption Among U.S. States

• Some U.S. states are moving ahead independently, with 20% of state legislatures considering holding Bitcoin reserves.
• El Salvador’s latest Bitcoin purchase signals a possible trend toward accumulation, exceeding its previous one-BTC-per-day buying strategy.