Naturally rebellious? El Salvador is not afraid of IMF pressure, already holding over 6,000 BTC!

Internal pressure and external controversy

El Salvador's latest Bitcoin purchase has once again attracted global attention. According to data from the National Bitcoin Office of the country, the country's treasury holds a total of 6,000.77 coins, with an estimated market value of 561 million dollars. Despite strong pressure from the International Monetary Fund (IMF), the country shows no signs of stopping and continues to push forward with its cryptocurrency policy.

Source: Bitcoin Office

The Salvadoran government announced a plan to "buy one Bitcoin a day" in 2022, and now it has the sixth largest government Bitcoin reserve in the world, second only to the United States, China, the United Kingdom, Ukraine, and Bhutan. Despite the continuous remarks from the IMF and some traditional financial institutions, suggesting that the volatility of Bitcoin could pose a risk to the country's financial stability, President Nayib Bukele clearly has no intention of being swayed by these doubts.

IMF warns of $14 billion loan case

In fact, El Salvador has been negotiating a $1.4 billion loan with the IMF in recent years and is under fiscal pressure. However, in the draft contract, the IMF called for the country's "moderate convergence" of bitcoin policy, proposing to forcibly delete the country's coin purchase strategy and limit it to official use. However, El Salvador does not seem to relent so far, continuing to actively buy bitcoin in the open market. Critics argue that such a risky move could detonate fiscal risks that could saddle the country with a heavy burden of public debt if bitcoin falls sharply in value.

In response, the Bouglei government stated that the plan is a 'long-term strategy' focused on the potential of Bitcoin to resist inflation and its potential as a global emerging reserve asset. Government officials emphasized that Bitcoin's legal status in the country will greatly promote tourism, trade, and investment, and in the long run, the benefits will outweigh the drawbacks. Recently, Stacy Herbert, the director of the National Bitcoin Office, also hinted that the government may accelerate the pace of coin purchases in the future and stated that the government has no intention of reducing its holdings.

The impact on the global cryptocurrency market

Market observers point out that El Salvador's large holdings of over 6,000 bitcoins have a symbolic significance far greater than the actual trading volume, equivalent to playing the role of 'public institution bullish' on the international stage. Especially after the bear market, Bukele's 'DCA' strategy has been highly publicized and has also attracted follow-up effects from other countries, such as discussions among some states and politicians in the United States on whether to add bitcoin to official reserves.

However, investment bank analysts also cautioned: 'Once the global financial situation deteriorates, or if Bitcoin faces significant negative news, El Salvador may suffer serious financial volatility risk.'

Even if you insist on buying at a high point, if the future is not as expected, the stability of the national finances may be questioned. On the other hand, if Bitcoin continues to strengthen and reach new highs, El Salvador may also profit greatly from it and demonstrate the investment potential brought by emerging markets.

Although traditional international financial institutions such as the IMF and World Bank still hold high concerns about El Salvador's Bitcoin measures, the Bukele government seems determined not to back down, instead emphasizing its resolve to 'buy one more Bitcoin' repeatedly. While the world is once again focusing on the deadlock in negotiations between the country and the IMF, El Salvador is showing its attitude by continuing to expand its Bitcoin holdings. The outcome of this 'Bitcoin grand experiment' under multiple pressures remains to be seen, keeping everyone on tenterhooks.

'Born rebellious? El Salvador fears no IMF pressure, already holding over 6,000 bitcoins!' This article was first published in 'Crypto City.'