Cryptocurrencies To Watch

Tag: El Salvador

  • El Salvador Buys $1 Million BTC Amid Price Crash

    El Salvador Buys $1 Million BTC Amid Price Crash

    Following Thursday’s sharp crypto market crash, the Central American country El Salvador went bitcoin (BTC) shopping again. With BTC plummeting to $96,000, the government acquired about 11 BTC for $1 million. According to reports, since El Salvador adopted a strategic bitcoin reserve, it has acquired approximately 6000 BTC and is looking for opportunities to purchase more crypto to boost its stash.

    $1 Million Purchase

    While many crypto investors cashed out their profits and others sold off their holdings in fear of the price crash, El Salvador seized the opportunity to purchase more, solidifying its position as the world’s first country to adopt BTC as its primary reserve asset.

    The International Monetary Fund (IMF) criticized the adoption of a bitcoin reserve in 2021, stating that the volatility of the crypto market poses a risk to the economy. Recently, the IMF agreed to contribute $1.4 billion over the next 40 months to help reduce the country’s debt-to-GDP percentage. In return, the government will improve the country’s fiscal policies, including the BTC policy.

    Notably, El Salvador has not opted to stop purchasing crypto. The country announced on Thursday that it will continue to buy BTC and expand its national Bitcoin portfolio, displaying commitment and confidence in the crypto despite wavering market conditions.

    El Salvador Reap Bitcoin Profits

    Notably, after concluding its last purchase, the country now holds 5,980 BTC, valued at over $568 million at the bitcoin spot price of $95,000 at press time.

    According to famous American broadcaster Max Keiser, El Salvador has achieved solid economic stability with a 1% inflation rate and is living America’s dream through its bitcoin reserve strategy.

    Other countries, including the United States, have indicated interest in adopting a strategic bitcoin reserve. Throughout his campaign, U.S. President-elect Donald Trump pronounced support for crypto and plans to make America the world’s capital of bitcoin if he steps in next month. He won the support of the crypto community as they look forward to a crypto-friendly America under his administration.

    Meanwhile, many investors in the U.S. have gained access to crypto via the spot Bitcoin and Ether exchange-traded funds (ETF) approved earlier this year.

  • El Salvador to Continue Buying BTC, Says to Expand Bitcoin Reserve

    El Salvador to Continue Buying BTC, Says to Expand Bitcoin Reserve

    El Salvador, the first country to adopt Bitcoin as legal tender, has announced plans to continue purchasing bitcoin (BTC) and expand its national Bitcoin reserve. The decision represents the Central American country’s commitment to integrating crypto into its financial ecosystem despite the volatility that has characterized the crypto market.

    The announcement comes after the country secured a $3.3 billion International Monetary Fund (IMF) Loan. The funds will support public finances, support social programs, and stimulate economic growth. In return, the government has agreed to implement fiscal reforms, including the voluntary BTC policy.

    El Salvador Stacking BTC & Bitcoin Reserves

    Over the years, El Salvador has become known for its dedication to acquiring BTC. The Central American country started purchasing in 2021, paving the way for other countries, states, and institutions to emulate.

    El Salvador also recently announced that it would begin purchasing 1 BTC per day, possibly at an accelerated pace, for its strategic reserve. Despite the risk associated with bitcoin price volatility, the country currently owns 5,968.8 bitcoins, valued at approximately $602 million.

    In line with BTC reserves, 2024 has been a roller coaster, with institutions establishing their BTC reserves. On November 15, 2024, the House of Representatives of Pennsylvania, the fifth-most populous state in the United States, made a strategic move to support crypto adoption by passing a law to add bitcoin to the state balance sheet as a reserve asset.  The bill aimed to establish a strategic Bitcoin reserve, potentially boosting America’s standing as a crypto hub.

    An Ohio lawmaker also recently introduced a bill that could position the state to embrace BTC. The proposed legislation seeks to establish a state Bitcoin reserve, allowing Ohio to purchase and hold bitcoin as part of its financial assets.

    The lawmaker noted the creation of a framework for the state to acquire, hold, and potentially utilize BTC in various capacities, including as a hedge against inflation and a tool for diversifying state financial reserves.

    No To Bitcoin Reserves

    With states turning to create a Bitcoin reserve, not everyone agrees with the move. Former United States Treasury Secretary Lawrence Summers criticized President-elect Donald Trump’s proposal for a strategic Bitcoin reserve, calling it “crazy.” He accused the move of being a strategy designed to appease his crypto campaign donors.

    Also, Avik Roy, president of the Foundation for Research on Equal Opportunity, stated at a crypto summit last month that Bitcoin’s potential benefits are being “overhyped.”

    Saylor Supports Bitcoin

    As such, to help clear some doubts, popular American entrepreneur and Bitcoin champion Michael Saylor said Bitcoin is an economy, not a Ponzi scheme. The executive expressed his confidence in the crypto and defended it from opposing opinions.

    Additionally, he stated that his Bitcoin purchases are unlimited. His company will keep buying BTC forever, no matter the price, because he believes every day is a good opportunity to acquire the crypto asset.

  • El Salvador Considers Bitcoin Policy Reforms to Secure $1.3B IMF Loan

    El Salvador Considers Bitcoin Policy Reforms to Secure $1.3B IMF Loan

    El Salvador, the world’s first country to adopt Bitcoin as legal tender, is considering significant reforms to its cryptocurrency policies to secure a loan from the International Monetary Fund (IMF).

    Over $1.2B Loan Deal

    El Salvador is working toward securing a $1.3 billion loan arrangement with the IMF, conditional on adjustments to its Bitcoin law, according to a report by the Financial Times, which cited sources familiar with the story.

    The deal is also expected to unlock another $1 billion of lending from the World Bank and $1 billion from the Inter-American Development Bank over the next few years.

    If finalized, the agreement would require El Salvador’s government to eliminate the legal obligation for businesses to accept Bitcoin as a form of payment, making its use optional.

    According to one of the people familiar with the story, the government also pledged to cut the budget deficit by 3.5% of GDP within three years through a combination of expenditure reductions and tax increases, enact an anti-corruption law, and boost reserves from $11 billion to $15 billion.

    El Salvador Accumulating BTC

    The IMF has consistently opposed El Salvador’s embrace of Bitcoin, cautioning the government and President Nayib Bukele about the financial stability challenges linked to the decision to make Bitcoin a legal tender in September 2021. 

    In February 2023, the IMF called on El Salvador to mitigate risks associated with Bitcoin, stating that the anticipated benefits of its adoption had not been realized. During this period, bitcoin was valued at approximately $21,600, according to data from CoinGecko.

    Since implementing its Bitcoin Law in September 2021, El Salvador has been actively acquiring BTC, with its initial purchase of 200 BTC occurring on September 6, 2021. The government has maintained its Bitcoin purchasing strategy, committing to purchase one bitcoin per day, and has accumulated a total of 5,942 BTC by November 2024.

    Following bitcoin’s surge to record highs above $100,000 in early December 2024, El Salvador’s unrealized profits from its BTC acquisitions skyrocketed to over $300 million.