El Salvador expanded its Bitcoin holdings, acquiring an additional 11 BTC for its national reserve. The purchase, valued at approximately $1.1 million based on current prices, raises the country's total Bitcoin stockpile to 6,067 BTC, now estimated to be worth around $600 million.
The move to bolster its Bitcoin reserve comes shortly after El Salvador's decision to roll back certain Bitcoin-friendly measures. These steps were taken as part of an agreement to receive a $1.4 billion loan from the International Monetary Fund (IMF).
The agreement necessitated the phasing out of the Chivo wallet and the cessation of accepting tax payments in Bitcoin. Despite these changes, the El Salvadoran government maintains Bitcoin as an optional legal tender and continues to express its commitment to increasing its reserve of the digital currency.
This latest Bitcoin acquisition follows a period of significant geopolitical tension, with Bitcoin's value rebounding to $100,000 amidst the early stages of a potential trade war involving the United States, Canada, China, and Mexico. El Salvador's aggressive approach to expanding its Bitcoin holdings also aligns with the country's recent agreement to accept deported criminals and migrants from the U.S. for a fee.
The announcement of the Bitcoin purchase was made following a meeting in El Salvador between President Nayib Bukele and U.S. Secretary of State Marco Rubio. Prior to this meeting, President Donald Trump had a telephone conversation with Bukele on January 23, which coincided with a surge in Bitcoin's price to $105,000, as market participants speculated on the potential for U.S.-El Salvadoran cooperation on Bitcoin matters.
While there is no official confirmation that discussions about cryptocurrency took place between Bukele, Rubio, or Trump, El Salvador's increasing role as a Bitcoin accumulator could fuel speculation about the U.S. potentially establishing a strategic Bitcoin reserve.
President Trump has already signed an order to form a working group to evaluate the feasibility of a "national digital assets stockpile." This group is tasked with proposing regulatory and legislative recommendations within 180 days, as outlined in the order titled "Strengthening American Leadership in Digital Financial Technology."
As the U.S. government currently possesses nearly 1% of all circulating Bitcoin, largely due to seizures from law enforcement actions, the working group's recommendations could impact whether these assets are retained or sold.
Meanwhile, several U.S. states are considering the establishment of their own Bitcoin reserves, further indicating a growing interest in cryptocurrency at various levels of government. El Salvador's latest purchase exceeds its previous policy of acquiring one BTC per day, possibly in anticipation of a broader trend of Bitcoin accumulation among nations.
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