Key Highlights
- The El Salvador government has continued its strategy of buying Bitcoin whenever the market falls with the 1,090 BTC purchase.
- The purchase brings the total government holdings to about 7,474 BTC, currently worth around $670 million.
- The acquisition has raised questions about compliance with IMF loan restrictions on new BTC purchases.
- Despite the bullish BTC strategy, most Salvadorans still prefer using the U.S. dollar, but the government sees Bitcoin as a long-term plan.
El Salvador, the first country to make Bitcoin legal tender, said it added 1,090 Bitcoin (BTC) on Monday, a purchase worth nearly $100 million after Bitcoin fell below $90,000. This brings the government’s publicly reported total holdings to approximately 7,474 BTC, worth around $670 million at current prices.
According to data from the country’s Bitcoin Office, the purchase occurred around 7:00 p.m. ET.
The purchase comes amid Bitcoin falling below $90,000, hitting a six-month low as global markets weakened. Even so, at the time of writing, it was trading around $89,916, still down about 5% in the last 24 hours, as per data from CoinMarketCap.
El Salvador’s President Nayib Bukele posted a screenshot of the acquisition on X, signaling that the government is still following its long-running approach of adding bitcoin during price dips. Since November 2022, the administration has claimed to buy 1 BTC per day, alongside occasional large purchases like this one.
Tension with IMF conditions
Despite the announcement, there is confusion about whether El Salvador actually bought 1,090 BTC from the open market. Under a $1.3 billion loan agreement with the International Monetary Fund (IMF), the country’s public sector is not supposed to make new Bitcoin purchases.
The IMF repeatedly urged the country to limit public sector exposure due to Bitcoin’s volatility. An IMF report also suggested that recent increases in reserves may simply reflect the government moving or consolidating existing holdings rather than new buys.
However, in May, President Nayib Bukele pushed back against repeated predictions that El Salvador would end its Bitcoin policy, saying people had wrongly claimed it would stop in April, June, or December.
He argued that if the country didn’t back down when it was isolated internationally and even abandoned by many Bitcoin supporters, it certainly won’t stop now. Bukele summed it up with a sharp line, “Proof of work is greater than proof of whining.”
People still prefer dollars, but the strategy continues
Stacy Herbert, Head of the Bitcoin Office, has previously challenged the IMF’s claims and maintains that El Salvador continues to buy bitcoin regardless of the conditions in the loan agreement.
While El Salvador became the first country to adopt bitcoin as legal tender in 2021, actual day-to-day use remains limited. Most people and businesses still rely primarily on the U.S. dollar, which remains the country’s main currency. Government-run bitcoin apps and wallets have seen mixed engagement since rollout.
Even so, the administration positions its Bitcoin strategy as a long-term effort, continuing to accumulate coins during market corrections. With its reported holdings, El Salvador is now considered one of the largest government Bitcoin holders, behind the U.S., China, and the U.K.
