Bukele and Bitcoin -- How's it going?

The price of Bitcoin this morning was around $67,250, down 45% from its high above $120,000 in October.   This represented a decline of roughly $300 million in the value of the country's Bitcoin reserves in just four months. 

In an article titled Fall in bitcoin puts pressure on El Salvador's debt and complicates the relationship with the IMF, Bloomberg suggests that this fall in value of the volatile crypto-currency and the corresponding decline in El Salvador's reserves may be causing international investors to question the country's finances. 

When the Bukele government finally reached agreement with the IMF on the terms of the $1.4 billion loan facility in December 2024, the IMF required El Salvador to undo the law which made Bitcoin legal tender in the country, and to sell off the government's Bitcoin wallet "Chivo."  The country promised not to increase its exposure to Bitcoin risks.  

In a staff statement on December 22, 2025, the IMF reported:

Negotiations for the sale of the government e-wallet Chivo are well advanced, and discussions with regards to the Bitcoin project continue, centered on enhancing transparency, safeguarding public resources, and mitigating risks.

Bukele, however, continues to tout the government purchases of one Bitcoin per day which have continued unabated.  Faced with the current market decline in Bitcoin's value, Bukele announced on social media at the end of January that the country was "buying the dip" as it bought both gold and Bitcoin.  His government continues to promote Bitcoin through its National Bitcoin Office, by holding conferences and developing courses to teach school students about the crypto asset. 

According to Bloomberg, this ongoing emphasis on Bitcoin could put the country on a collision course with the International Monetary Fund, which is in the process of disbursing a $1.4 Billion loan program to the country.  Investor concern over challenges with the IMF has resulted in a recent decline in the value of the country's international bonds.

The Bloomberg article suggests that El Salvador may be banking on Bukele's strong relationship with Donald Trump to avoid financial problems in its dealings with the IMF. The US has significant influence in IMF decisions, or Bukele may be counting on the US to provide financing if the IMF pulls its support.

Meanwhile, the InterAmerican Development Bank this week announced a $1.3 billion loan to El Salvador to be used for housing and for tourism infrastructure.  Without explanation the government has also delayed in announcing a public pension reform measure related to its growing use of pension system assets to finance its debt.