IMF Pushes for Chivo Wallet Privatization as El Salvador Keeps Buying Bitcoin
The IMF says talks with El Salvador have advanced toward selling or privatizing the state-run Chivo Bitcoin wallet as part of the $1.4bn Extended Fund Facility (EFF) second-review. Negotiations prioritize increased transparency, protection of public funds and limits on government exposure to Bitcoin-related fiscal and operational risks. The EFF bars the use of taxpayer or borrowed funds by the government to buy cryptocurrency and seeks to wind down or transfer public-sector Bitcoin infrastructure. Despite IMF pressure and restrictions, El Salvador continues daily Bitcoin accumulation — the National Bitcoin Office reports holdings of about 7,509 BTC (roughly $65m) and recent monthly purchases of 1,098 BTC. The IMF nonetheless praised El Salvador’s broader macro performance — stronger-than-expected GDP growth (near 4%), rising foreign reserves, reduced domestic borrowing and progress on banking and anti-money-laundering reforms — and said staff will keep engaging as Bitcoin risks are addressed. For traders: ongoing privatization talks and reduced state involvement aim to lower fiscal risk, but continued public BTC buys and political resistance to halting purchases mean supply/demand dynamics and local sentiment remain important near-term drivers for BTC exposure tied to El Salvador.
Neutral
The news is classified as neutral for Bitcoin price impact. Reasons: 1) Policy tightening and potential privatization of the Chivo wallet reduce sovereign fiscal risk tied to BTC, which is typically supportive for market confidence and thus modestly bullish in the medium term. 2) Offsetting this, El Salvador’s continued accumulation (7,509 BTC and recent monthly purchases of 1,098 BTC) keeps state-driven demand active, which can tighten local supply and add near-term upward pressure. 3) The IMF’s restrictions (no taxpayer or borrowed funds for crypto purchases) could limit future large-scale public buys, capping a potential sustained bullish driver. 4) The political stance (government resistance to halting purchases) increases uncertainty and makes outcomes binary—privatization could calm markets, while continued state buying keeps volatility higher. 5) Macro praise from the IMF (growth, reserves, reforms) reduces systemic risk, which is constructive for risk assets but does not directly translate into immediate BTC price moves. Overall, positives and negatives largely offset: market reaction will depend on details and timing of any Chivo sale/transfer and whether public purchases continue, yielding a neutral classification for BTC price impact.