Bitcoin News Update: El Salvador Bets on Bitcoin as a Sovereignty Safeguard, Challenging IMF Conditions
- El Salvador's government defied IMF loan terms by purchasing $100M in Bitcoin , adding 1,090 BTC to its strategic reserves during a price slump. - Total holdings now reach 7,474 BTC ($676M), acquired through a "buy the dip" strategy despite IMF warnings about financial stability risks. - The IMF has not condemned the purchases but emphasizes compliance, while critics warn of fiscal instability and lack of public education on Bitcoin. - Bukele's administration defends Bitcoin as a hedge against inflation
El Salvador's administration has gone against International Monetary Fund (IMF) restrictions by acquiring $100 million worth of
This action runs counter to the terms of a $1.4 billion IMF loan deal finalized in late 2024, which specifically banned public-sector Bitcoin purchases and required the government to scale back its digital currency initiatives.
The timing of the acquisition demonstrates El Salvador's strategy of "buying the dip," taking advantage of Bitcoin's 28% drop from its October high of $126,000. The country has a history of increasing its holdings during market corrections, with both Bukele and the Bitcoin Office reiterating their long-term faith in Bitcoin's value. "Bitcoin stands for freedom, openness, and empowering individuals," said Stacy Herbert, head of the Bitcoin Office,
El Salvador's resistance has sparked both support and opposition.
With Bitcoin hovering around $91,768, El Salvador's $100 million investment highlights its unique position in the world of sovereign crypto adoption. Whether this bold move will prove economically sound is still unknown, but Bukele's government has
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