El Salvador’s Reserves Tumble as Bitcoin Extends Losses

El Salvador President Nayib Bukele has made it a habit to “buy the dip” in recent months, but bitcoin’s price continues to fall

article-image

El Salvadorian President Nayib Bukele | Blockworks exclusive art by axel rangel

share

key takeaways

  • El Salvador’s bitcoin reserves lose almost $20 million in six weeks amid market sell-off
  • The country’s highly anticipated bitcoin bonds are still on hold, likely until market conditions improve

El Salvador has amassed an estimated 2,301 bitcoins since announcing it would recognize the world’s largest cryptocurrency as legal tender a year ago. 

El Salvador President Nayib Bukele has made it a habit to “buy the dip” in recent months, often taking to Twitter to brag about locking in lower prices. At the time of Bukele’s last Twitter update, the country’s bitcoin reserves totalled about $71.4 million. 

Loading Tweet..

But recent market conditions have pushed bitcoin’s price even lower, driving El Salvador’s holdings down to around $52 million. 

The sell-off comes as El Salvador continues to delay the issue of its highly anticipated “volcano bonds,” which were originally slated to launch in March 2022. The country opted to postpone the planned $1 billion offering, which is supposed to fund El Salvador’s “Bitcoin City,” following turbulence in the markets, Finance Minister Alejandro Zelaya said. 

The bonds are largely seen as one of the Central American nation’s last hopes of meeting its financing needs. The International Monetary Fund (IMF) has expressed concern about the sustainability of El Salvador’s bitcoin experiment and is unlikely to approve loan payments. The World Bank also refused to help the country with its bitcoin adoption plans when they were first announced in June 2021. 

El Salvador has an $800 million bond maturing in January 2023. In July 2021, ratings agency Moody’s downgraded the country’s debt rating to CAA1, meaning it is considered at risk of defaulting on loans. 

Public perception is deteriorating, too, thanks to various tweets from Bukele making light of the situation. Bukele trades bitcoin on behalf of El Salvador on his cellphone, he admitted in another tweet.

“That kind of behavior doesn’t help, it really shows that he either doesn’t understand or he doesn’t care,” Nathalie Marshik, head of emerging markets sovereign research at Stifel Financial Corp, told Blockworks at the time of the tweets. “You have massive financing needs and you use your taxpayer money to day-trade bitcoin? What is the strategy in that?”

[stock_market_widget type=”accordion” template=”chart” color=”#5D25E5″ assets=”BTC-USD” start_expanded=”true” display_currency_symbol=”true” api=”yf” chart_range=”1mo” chart_interval=”1d”]


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (4).png

Research

Even as the most performant, widely used blockchain today, Solana is still far from perfect, prompting some teams to iterate upon some design choices while maintaining compatibility at the SVM execution layer. This report analyzes three emergent SVM chains (Eclipse, Atlas, and Fogo) to understand the motivations behind the technical architectures, as well as the current state and future outlook.

article-image

Fundamental investors are turning to token buybacks

article-image

A Glassnode report found that the accumulation range for bitcoin is ‘weak,’ indicating a decline in demand

article-image

CEO Bam Azizi said he’ll only be seeking stablecoin-exclusive funding rounds from now on

article-image

Sponsored

WalletConnect is set to deepen its role by integrating with emerging standards and expanding its utility across different onchain sectors

article-image

Zeta Markets has shipped testnet for Bullet, a low-latency “network extension,” the team told Lightspeed exclusively

article-image

Having passed Congress, the resolution will now head to Trump’s desk