Bitcoin News Today: Defying IMF Terms, El Salvador Banks on Bitcoin for Sovereignty Hedge

El Salvador's government has defied International Monetary Fund (IMF) restrictions to purchase $100 million in Bitcoin, adding 1,090 BTC to its strategic reserves during a seven-month price slump. The acquisition, confirmed by President Nayib Bukele via X, brings the nation's total Bitcoin holdings to 7,474 BTC, valued at approximately $676 million, according to the country's Bitcoin Office. The purchase occurred as Bitcoin fell below $90,000 for the first time since April, marking one of the largest single-day additions to El Salvador's crypto treasury since it began accumulating the asset in 2021.

The move directly contradicts terms of a $1.4 billion IMF loan agreement signed in late 2024, which explicitly prohibited public-sector Bitcoin purchases and mandated a reduction in government-backed digital currency initiatives. IMF staff reports in July stated that El Salvador had not acquired new Bitcoin since February 2025, attributing reserve increases to wallet consolidations rather than market purchases. However, Bukele's administration has continued its daily 1-BTC accumulation policy since November 2022, a strategy it has defended as a hedge against inflation and a tool for financial sovereignty.

The timing of the purchase highlights El Salvador's "buy the dip" approach, capitalizing on Bitcoin's 28% decline from its October peak of $126,000. The country has historically increased holdings during price corrections, with Bukele and his Bitcoin Office emphasizing long-term confidence in the asset's value. "Bitcoin is freedom, transparency, and individual empowerment," said Stacy Herbert, director of the Bitcoin Office, in March 2025. The latest acquisition arrives as global markets grapple with a broader selloff, with Bitcoin ETFs recording $1.26 billion in outflows this month alone.

The IMF's stance remains ambiguous. While its July report warned of financial stability risks from El Salvador's Bitcoin holdings, it has not explicitly condemned the recent purchases, instead stating that "efforts will continue" to ensure compliance with loan conditions. Analysts suggest that the government's consolidation of Bitcoin across multiple wallets-now capped at 500 BTC per address-could technically align with IMF terms by avoiding new public-sector exposure.

El Salvador's defiance has drawn both praise and criticism. Proponents highlight the nation's commitment to digital asset innovation, including geothermal-powered Bitcoin mining and cross-border regulatory partnerships with the U.S. Securities and Exchange Commission. Critics, including IMF officials and financial experts, argue the strategy risks fiscal instability and undermines consumer protections. "Bitcoin is no longer legal tender, and we haven't seen any other effort to educate people," said Quentin Ehrenmann, a Bitcoin adoption advocate, in July.

As Bitcoin fluctuates near $91,768, El Salvador's $100 million bet underscores its role as a global outlier in sovereign crypto adoption. Whether this strategy proves economically prudent remains uncertain, but Bukele's administration has signaled no intention to halt its accumulation, framing Bitcoin as a cornerstone of the country's economic modernization.