YEREVAN (CoinChapter.com) — President Nayib Bukele continues to expand El Salvador’s Bitcoin reserves, even after signing an agreement with the International Monetary Fund (IMF). The deal, announced in December 2024, aims to stabilize the country’s debt-laden economy but includes restrictions on Bitcoin usage.
Under the agreement, Bitcoin is no longer mandatory for businesses, and the government cannot collect taxes in Bitcoin. However, El Salvador’s Bitcoin accumulation strategy remains unchanged. In early 2025, the government purchased over two dozen Bitcoin, increasing its total holdings. The IMF board has yet to approve the final deal, leaving key terms uncertain.
IMF Agreement with El Salvador. Source: IMFTrump’s Crypto Policies Align With El Salvador’s Bitcoin Strategy
The new Donald Trump administration in the United States has supported Bitcoin expansion, aligning with El Salvador’s Bitcoin policy under Nayib Bukele. Trump has signaled interest in a national digital asset reserve, creating momentum for Bitcoin-friendly regulations.
At a press conference on Jan. 14, Bukele stated,
“This year, with Trump’s inauguration and the coming of age of Bitcoin ETFs, will be crucial for both Bitcoin and the broader ecosystem…and we’re reaping the benefits.”
Bitcoin surpassed $100,000 in late 2024, increasing the value of El Salvador’s Bitcoin reserves. This growth coincided with a decline in crime rates, strengthening Nayib Bukele’s political standing after his reelection in 2024.
El Salvador’s Bitcoin Reserves Now Exceed $600 Million
El Salvador’s Bitcoin holdings have exceeded 600 BTC, valued at nearly $600 million. At current market rates, Bitcoin makes up 15% of the country’s international reserves, ranking El Salvador sixth globally for sovereign Bitcoin holdings, according to Bitbo.
El Salvador’s Bitcoin holdings. Source: El Salvador’s Bitcoin OfficeBukele previously referred to the country’s Bitcoin reserves as a “Bitcoin piggy bank.” In 2023, the government transferred its Bitcoin holdings to a cold wallet, securing them for long-term storage.
Bitcoin’s price surge has increased the reserves’ value, but financial analysts point to potential market volatility. If Bitcoin prices fall, El Salvador’s Bitcoin strategy could face risks.
Crypto-Friendly Policies Attract Companies
El Salvador’s Bitcoin regulations have attracted major crypto firms. Recently, Tether, the largest stablecoin issuer, secured a digital asset license and announced plans to relocate its headquarters to El Salvador.
Stacy Herbert, head of El Salvador’s National Bitcoin Office, emphasized the broader impact of Bitcoin adoption.
“For a tiny country like El Salvador, the Bitcoin initiative was the greatest rebrand in history, with millions of dollars worth of free publicity,”
she said.
Industry experts expect more companies to enter El Salvador’s Bitcoin market. Guilherme Rebane, a partner at Nonco, said Tether’s move has increased interest from other crypto firms.
Bitcoin Adoption in El Salvador Remains Low
While El Salvador’s Bitcoin law has gained international attention, local adoption remains limited. A recent poll found that only 7.5% of Salvadorans have used Bitcoin for transactions.
A survey from Universidad Francisco Gavidia (UFG) found that 92% of Salvadorans do not use Bitcoin for payments. Former Central Bank Governor Carlos Acevedo noted that Bitcoin transactions require higher income levels, which many do not have.
“Most of the population earns minimum wage. I hardly know anyone who uses Bitcoin for everyday purchases,”
he said.
Bitcoin Usage in El Salvador. Source: UFGSome Salvadorans question whether El Salvador’s Bitcoin reserves should be used for social programs. Cristian Castillo, a local resident, said,
“This Bitcoin investment would be better spent on schools, hospitals, and job opportunities.”
Lack of Transparency in BTC Holdings Raises Questions
While El Salvador’s Bitcoin holdings have increased in value, concerns remain about transparency. Unlike traditional reserve assets, Bitcoin transactions are not fully disclosed.
Acevedo noted that details on Bitcoin purchases are not always available.
“Unless the president tweets something, we don’t really know much,”
he said.
Above all, despite these concerns, El Salvador’s Bitcoin reserves continue to grow, with the government maintaining its accumulation strategy.
The post Nayib Bukele’s Bitcoin Strategy: Is El Salvador’s Crypto Bet Paying Off? appeared first on Coinchapter.
