El Salvador Buys the Dip, Adds 5 More Bitcoin as Price Hits $83K
El Salvador has expanded its Bitcoin holdings once again, purchasing five additional BTC amid a market dip that saw the asset fall to $83,000. The acquisition, worth approximately $415,000, brings the country’s total Bitcoin reserves to 6,100 BTC, currently valued at around $510 million, according to data from Arkham Intelligence. Despite ongoing scrutiny from international financial institutions, El Salvador has maintained its commitment to Bitcoin, following a strategy of acquiring one BTC per day since November 2022.
El Salvador Buys Bitcoin After Securing $1.4B IMF Loan
The latest purchase comes shortly after the International Monetary Fund (IMF) approved a $1.4 billion loan to the country on February 27. The agreement includes conditions requiring El Salvador to reduce state participation in cryptocurrency transactions, including Bitcoin purchases. In response to IMF requirements, El Salvador has made adjustments to its Bitcoin policies, such as making BTC acceptance voluntary and scaling back direct government involvement in related initiatives. The IMF’s program aims to enhance fiscal stability while managing risks associated with the country’s Bitcoin adoption. Beyond cryptocurrency, President Nayib Bukele is pushing for El Salvador to become a regional tech hub. He recently met with Andreessen Horowitz (a16z) co-founders Ben Horowitz and Marc Andreessen to discuss AI investment opportunities.
The discussions focused on policy incentives, including a 0% tax rate for tech industries and regulatory support for AI development, as part of efforts to position El Salvador as a leader in technological innovation. As reported, El Salvador has also begun building “Bitcoin City Airport,” an air transport hub that will supposedly one day link Bitcoin City to the rest of the world. The nation’s official press agency published a video on its YouTube page showing the Salvadoran President Nayib Bukele at a press event at the construction site, laying the first foundation stone on what will one day become Pacific Airport (official name).
El Salvador Stacks BTC While Others Pull Back
While El Salvador continues acquiring BTC, some other countries have taken the opposite stance. For one, Swiss National Bank (SNB) President Martin Schlegel has dismissed the idea of adding Bitcoin to Switzerland’s reserve assets, citing concerns over stability, liquidity, and security risks. In a March 1 interview with Swiss media outlet Tamedia, Schlegel argued that Bitcoin’s volatility makes it an unsuitable reserve asset for the country’s central bank. “Our reserves need to be highly liquid so they can be used quickly for monetary policy purposes if needed,” he said, emphasizing that Bitcoin’s price swings and market fluctuations are incompatible with the SNB’s financial strategy. It is worth noting that several U.S. states, including Illinois, Kentucky, Maryland, New Hampshire, New Mexico, North Dakota, Ohio, Pennsylvania, South Dakota, and Texas, have also introduced bills that could enable them to hold Bitcoin and other cryptos as reserve assets. More recently, lawmakers in Ohio introduced House Bill 116, aiming to prevent the state from imposing additional taxes on digital assets when used for payments.