Key Insights
- El Salvador’s Bitcoin holdings are worth $300 million less after the recent decline in BTC value.
- The country is still buying 1 BTC per day in a strong sign of bullishness.
- There are concerns that El Salvador could lose its IMF deal if it does not stop buying BTC.
The Central American country El Salvador has seen a massive drop in the value of its Bitcoin holdings following the recent price decline. The country that holds more than 7,500 BTC has seen the value of its holdings drop by more than $300 million.
With the drop, El Salvador’s Bitcoin holdings are now worth around $495 million. At its peak, it was worth almost $800 million.
El Salvador Forges Ahead With One Bitcoin a Day Policy
The decline in El Salvador’s Bitcoin treasury is not surprising given the flagship asset’s recent crash. Since hitting a peak of $126,000 in October, it has been in steady decline.
However, the sharp drop over the past few weeks saw Bitcoin fall below $70,000 for the first time in more than a year. It has since remained stuck below that price, with another 2.34% drop today, bringing it to $65,000.
Despite the drop, which has wiped out El Salvador’s Bitcoin gains, the country has remained committed to its 1 BTC per day purchase.
According to the El Salvador Bitcoin Office, the country added 8 BTC over the last 7 days. Its most recent purchase was few hours ago, highlighting its bullish stance on Bitcoin acquisition.
Investors Concerned About IMF Pushback on El Salvador
However, not everyone is comfortable with the country’s push for Bitcoin. Concerns have emerged among traditional investors who believe it could be a challenge. This is due to El Salvador’s engagement with the International Monetary Fund (IMF) on the $1.4 billion loan program.
The IMF has previously expressed concerns about El Salvador’s Bitcoin purchase but recently acknowledged the need for greater transparency. However, any sign of permissiveness could disappear now that Bitcoin has lost more than 40% of its value.
Some believe the IMF could withdraw from the loan program if El Salvador does not stop buying BTC. This could have a devastating effect on the country’s debt market.
Interestingly, the recent drop in Bitcoin value was enough to cause a short-term drop in El Salvador’s 10-year bonds. Although it has now recovered, the cost of insuring against El Salvador’s default on its bonds has increased, reflecting sentiment around risk.
However, some experts believe that the concerns might be overblown due to El Salvador’s alliance with the Trump administration. Some believe the US, as the IMF’s largest shareholder, could influence ensuring that El Salvador continues to receive the loan.
Meanwhile, the country recently got a $1.3 billion loan commitment for 2026 from the Inter-American Development Bank. This could further ease any potential pressure from the IMF.
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