Faustian Bargain or 5D Chess? Inside El Salvador’s IMF Agreement

Happy Monday Bitcoiners, it's Bam here with another Bitcoin update!

Each week, our team at Bitcoin News saves you time by curating the most impactful events into a concise, easy-to-read update.

Notable events this week include:

• BPI drafts an executive order to establish a Strategic Bitcoin Reserve.

• MARA heats 80,000 homes by mining Bitcoin

• Bitcoin ETFs surpass gold ETFs in assets under management.

Let’s dive in! ⚡

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LATEST NEWS 📰

🙌 ADOPTION

• BlackRock, managing $11.5 trillion in assets, releases a 3-minute educational video on Bitcoin for its clients.

• Over the past 30 days, more than $3 billion per day has flowed into the Bitcoin network.

• Michael Saylor drafts a “Digital Assets Framework” for the incoming administration, defining key terms and a strategy to ensure U.S. leadership in the global digital economy.

⚖️ LEGAL

• The Bitcoin Policy Institute has drafted an executive order for a Strategic Bitcoin Reserve, ready for Trump to implement on day one.

• SEC Commissioner Hester Peirce suggests Spot Bitcoin ETFs could offer “in-kind” redemptions in 2025, letting investors buy ETFs with cash and withdraw Bitcoin directly to self-custody wallets.

• Interpol issues a Red Notice for Hex founder and notorious Bitcoin critic Richard Heart, citing accusations of tax fraud and assault.

📈 MARKETS

• U.S. Bitcoin ETFs have surpassed U.S. gold ETFs in assets under management.

• LEEF Brands becomes one of the first public cannabis companies to integrate Bitcoin into its treasury with a $5M Bitcoin-backed debenture offering.

• Relai, Europe’s leading Bitcoin-only exchange, acquires 13 BTC for $1.2 million at an average price of $94K per BTC, increasing its Bitcoin treasury to 30 BTC.

⛏️ MINING

• MARA acquires $1.5 billion in Bitcoin, increasing its holdings to 44,394 BTC and cementing its position as the world’s second-largest corporate Bitcoin holder.

• MARA is also repurposing waste heat from its mining operations to heat 80,000 homes in Finland.

• US-listed miners’ share of the Bitcoin network hashrate reached a new all-time high, six months after Trump stated he wanted all remaining Bitcoin mined in the USA.

🗳️ POLITICS

• El Salvador secures a $3.5 billion IMF financing deal by agreeing to make Bitcoin use voluntary for merchants and phase out government involvement in the Chivo wallet.

• South Africa’s left-wing populist MK party publishes an open letter advocating for the establishment of a Strategic Bitcoin Reserve.

• Bitcoin Policy Institute prepares a report for incoming Treasury Secretary Scott Bessent titled “A Global Economic Reordering: US-China Competition and Bitcoin as a Tool of U.S. Statecraft.”

BAMS 2 SATS 🧢

It has been over three years since El Salvador enacted the Bitcoin Law, granting Bitcoin legal tender status. While the law allowed the voluntary use of Bitcoin for payments and taxes, it faced criticism from libertarians for mandating that large businesses accept Bitcoin. To support the rollout, the government launched the Chivo wallet, allowing users and merchants to convert Bitcoin to fiat currency upon receipt.

Naturally, the IMF opposed the introduction of a monetary system beyond its control at a sovereign level and withheld loans from El Salvador unless it repealed the Bitcoin Law. Despite criticism from prominent economists and pressure from the IMF, President Nayib Bukele stood firm.

El Salvador became the first country to establish a Strategic Bitcoin Reserve on the day the Bitcoin Law took effect, purchasing 400 Bitcoin—an initial investment now up 85%. After accumulating over 1,000 BTC as Bitcoin’s price dropped from $69,000 to $20,000, President Bukele doubled down during the bottom of the 2022 bear market. In November 2022, with Bitcoin at $17,000, Bukele announced a dollar-cost averaging (DCA) strategy to buy one Bitcoin per day.

Fast-forward to today: El Salvador is more prosperous than ever, despite being labeled a pariah by the IMF. Its Bitcoin holdings have grown to nearly 6,000 BTC, and foreign investment has surged across the board. Now, the IMF is back with loan offers and proposed structural adjustments, seeking to influence the country’s Bitcoin policies.

This time, El Salvador partially conceded by scaling back certain aspects of its Bitcoin policy. Taxes can no longer be paid in Bitcoin, the Chivo wallet’s operations are being phased out, and large businesses are no longer required to accept Bitcoin in daily transactions.

Some argue that removing the ability to pay taxes in Bitcoin is a significant setback for global Bitcoin adoption and its legitimacy as a currency. As it stands now, adoption will rely on the free market.

But could this be a Bitcoin Trojan Horse at the highest geopolitical level? Shortly after El Salvador secured a $3.5 billion financing deal from the IMF, President Bukele shared the following:

El Salvador’s one-Bitcoin-per-day DCA strategy seems to have included an additional 20 BTC over the weekend. It appears the IMF overlooked the issue of the country’s Strategic Bitcoin Reserve, allowing El Salvador to capitalize on the opportunity.

In the end, El Salvador may have gained the upper hand. The IMF’s stance shifted from “repeal the Bitcoin Law or we permanently exclude you from the global monetary system” to “make your already optional currency officially optional and phase out an unpopular app.”

El Salvador’s response?

“Thanks for the free money—we’ll just 10X our daily Bitcoin DCA.” (Or something to that effect.)

Stay safe, enjoy the ride & keep on stacking! 🎄
Bam

The Most Controversial Man in Bitcoin

Dennis Porter has been making headlines this year—not just for his Bitcoin policy work with the Satoshi Action Fund, but also for his bold approach to promoting it.

During our time in El Salvador, we sat down with him to discuss the state of nation-state Bitcoin adoption. In this exclusive interview, he reveals the next four countries planning to implement a Strategic Bitcoin Reserve.

This is a conversation you won’t want to miss.