El Salvador OKs Indefinite Reelection, Advances Bitcoin Strategy
El Salvador’s Legislative Assembly approved constitutional amendments allowing President Nayib Bukele indefinite presidential reelection. The reforms extend the term from five to six years, eliminate runoff votes and align presidential and legislative elections to save an estimated $50 million per cycle.
Critics warn the changes concentrate power, undermine democratic checks and risk authoritarianism amid reports of detained opposition lawyers. Supporters, citing a 78% approval rating, argue that synchronization of votes returns power to citizens and frees funds for public spending.
On the cryptocurrency front, the government claims daily Bitcoin purchases, holding 6,255.18 BTC, despite an IMF report stating no new buys since the $1.4 billion loan in December 2024. El Salvador also signed a memorandum with Bolivia’s largest bank to bolster regional crypto infrastructure. Traders should watch how political centralization from the presidential reelection plan and evolving Bitcoin strategy affect market confidence and adoption in this leading crypto use case.
Neutral
In the short term, increased political centralization and democratic concerns in El Salvador may weigh on investor sentiment, potentially introducing volatility around Bitcoin. However, the government’s continued Bitcoin purchases and the MOU with Bolivia’s largest bank provide clear institutional support and signal long-term demand. Historically, official backing can create price floors, while governance risks can trigger market dips. Balancing these factors, the net impact on Bitcoin’s price is expected to be neutral.