El Salvador Adds to Bitcoin Reserves While Balancing IMF Requirements
El Salvador President Nayib Bukele announced Tuesday that the country will continue purchasing bitcoin despite reaching a financing agreement with the International Monetary Fund (IMF) that was expected to limit such activities. "No, it's not stopping," Bukele stated on social media platform X. "If it didn't stop when the world ostracized us and most 'bitcoiners' abandoned us, it won't stop now, and it won't stop in the future."
The declaration comes after El Salvador and the IMF reached an agreement last December for a financing package worth over $3.5 billion, including a $1.4 billion loan. As part of this agreement, El Salvador was expected to scale back its bitcoin-related activities. The IMF had previously expressed concern about potential risks associated with El Salvador's bitcoin reserves, though it noted these risks "have not yet materialized."
El Salvador's Congress moved to comply with some IMF requirements by approving amendments that make bitcoin acceptance voluntary for the private sector, according to Reuters reporting. Following these legislative changes, the IMF approved the $1.4 billion loan last month, with an immediate disbursement of approximately $113 million to El Salvador.
In a press release last week, the IMF stated: "Going forward, program commitments will confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin." Despite this statement, El Salvador's strategic reserve announced on Tuesday that it had added more bitcoin to its holdings.
The country's total bitcoin reserves now stand at 6,101.18 BTC, valued at over $535 million at current market prices. This action appears to contradict the spirit of the IMF agreement, raising questions about how the continuation of bitcoin purchases might affect the ongoing financial relationship between El Salvador and the IMF.
Following Bukele's announcement, several cryptocurrency industry figures responded with supportive messages, including Strategy CEO Michael Saylor and crypto podcast host Peter McCormack. JAN3 CEO Samson Mow questioned how the IMF deal would impact El Salvador's future bitcoin purchases, though Bukele has not directly addressed this inquiry.
Meanwhile, in related cryptocurrency market developments, Ark Invest made notable portfolio adjustments Monday by purchasing 38,865 Coinbase shares worth $8 million for its Next Generation Internet exchange-traded fund (ARKW), while simultaneously selling $8.2 million of its own spot Bitcoin ETF (ARKB). This transaction mirrors a similar move last week when the Cathie Wood-led firm bought $8.7 million in COIN shares while selling $8.6 million of ARKB, suggesting a consistent rebalancing strategy as the cryptocurrency market pulled back from weekend gains.
Ark maintains a portfolio management policy preventing any single holding from exceeding 10% of a fund's value to ensure diversification. According to company disclosures, Coinbase currently represents the sixth-largest holding in Ark's ARKW fund with a 6% weighting valued at approximately $99.1 million as of March 3. Despite Ark's purchase, Coinbase shares closed down 4.6% Monday at $205.75, representing a nearly 20% loss year-to-date with the company currently valued at $38.3 billion.
