El Salvador has purchased a further 11 Bitcoin for its national reserve, worth roughly $1.1 million at today’s prices, taking advantage of the recent decline in prices to increase its hoard of the cryptocy to 6,067 BTC. The acquisition comes only days after the Central American country agreed to curtail some of its pro-Bitcoin policies in order to secure a $1.4 billion loan from the International Monetary Fund.
This included the winding down of the Chivo wallet and a halt to accepting tax payments in BTC, although the El Salvadoran government has kept Bitcoin as a voluntary legal tender and has reaffirmed its commitment to growing its reserve in the cryptocy. Its Bitcoin stockpile is now worth around $600 million at today’s prices, with BTC rebounding to $100,000 as it recovers from the opening salvos of a possible trade war between the US and Canada, China and Mexico.
The acceleration of El Salvador’s BTC acquisition policy comes not only after its agreement with the IMF, but also as the country agrees to accept deported criminals and migrants from the U.S. in exchange for a fee. Bukele made this announcement after a meeting in El Salvador between himself and U.S. Secretary of State Marco Rubio, with President Trump having already spoken via telephone with his similarly pro-Bitcoin counterpart.
That call, which took place on January 23, was a factor in Bitcoin’s rise to $105,000 on that date, as traders became excited about the possibility of some kind of U.S.-El Salvadoran cooperation or alignment on Bitcoin. There’s currently no official indication that Bukele talked specifically about crypto with either Rubio or Trump, but El Salvador’s status as a Bitcoin stockpiler may invite speculation that closer ties between the two countries makes a U.S. strategic reserve likelier.
President Trump has already signed an order creating a working group tasked with considering the desirability of a “national digital assets stockpile,” so the latter possibility may already be likely.
This order, dubbed Strengthening American Leadership in Digital Financial Technology, gives the newly formed working group 180 days in which to “recommend regulatory and legislative proposals that advance the policies established in this order.” The market may therefore receive good (or bad) news at some point in July, although one caveat is that the order suggests that any stockpile would potentially be “derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”
Given that the U.S. federal government currently holds almost 1% of Bitcoin’s entire circulating supply, a recommendation from the working group to hold the cryptocy may simply mean that the government doesn’t end up selling the proceeds of its Silk Road and other seizures. U.S. states, meanwhile, are racing ahead, with a fifth of all state legislatures now considering BTC reserves. And El Salvador’s purchase of 11 BTC could also be taken as a similar sign, with the Central American state going beyond its earlier one-BTC-per-day policy in anticipation of some future Bitcoin accumulation race.
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