El Salvador Halts Bitcoin Purchases Since Dec 2024 Under IMF Deal
El Salvador has halted Bitcoin purchases since December 2024, according to a July 2025 IMF Article IV Consultation report. Under a $1.4 billion IMF Extended Fund Facility, the government agreed to limit public-sector crypto activity and prioritize fiscal stability. On-chain data show no new BTC acquisitions; recent wallet movements were internal transfers, not fresh buys. In January 2025, Bitcoin lost its legal tender status in El Salvador. The state-backed Chivo Wallet will be privatized by the end of July. Authorities also plan to dissolve the Fidebitcoin trust and enhance transparency of state-owned enterprises. This shift in El Salvador Bitcoin policy could reduce demand for BTC and weigh on market sentiment in the short term. Traders should adjust their models to reflect corrected on-chain data and anticipate lower fiscal risk from public Bitcoin purchases.
Bearish
El Salvador’s halt in Bitcoin purchases signals weaker institutional demand under the IMF deal. In the short term, lower public-sector BTC acquisitions and the loss of legal tender status could dampen market sentiment and trading volumes. The privatization of the Chivo Wallet and dissolution of the Fidebitcoin trust reduce state-led demand uncertainty but signal a shift away from aggressive crypto experimentation. Over the long term, clarified regulations and reduced fiscal pressure may foster a more sustainable market environment. However, without fresh demand from a sovereign on-chain buyer, Bitcoin’s price may face downward pressure, making the near-term outlook bearish for BTC traders.