EL SALVADOR WEATHERS $300 MILLION BITCOIN LOSS AMID STALLED IMF DEBT TALKS

El Salvador’s pioneering Bitcoin strategy is facing a severe stress test as of February 13, 2026, with the country’s cryptocurrency portfolio losing nearly $300 million in value since its October 2025 peak. Currently holding 7,560 BTC (valued at ~$503.8 million), the government remains committed to its “one Bitcoin per day” purchase plan despite a surge in credit default swaps to a five-month high. This unwavering conviction is complicating critical negotiations with the International Monetary Fund (IMF), as the second review of a $1.4 billion loan facility remains on hold. With $450 million in bond payments due this year, the intersection of Bitcoin volatility and sovereign debt obligations has placed the nation at a fiscal crossroads. The Portfolio Drawdown: Conviction vs. Market Reality President Nayib Bukele’s long-term accumulation strategy is currently clashing with a prolonged digital asset bear market. Value Erosion: From a peak of $800 million in late 2025, El Salvador’s Bitcoin reserves have declined to approximately $503.8 million. This $300 million paper loss highlights the inherent risks of using a volatile asset as a primary national reserve.Diversification Efforts: In a move toward fiscal balance, the government recently spent $50 million to acquire gold, seeking a traditional safe-haven hedge as macroeconomic tensions rise and crypto-linked volatility persists. The IMF Standoff: Bitcoin as a Barrier to Credit Relations between El Salvador and the IMF have grown increasingly strained, threatening the stability of the country’s sovereign debt recovery. Stalled Reviews: The second review of the 40-month Extended Fund Facility has been on hold since September 2025. The Fund has expressed significant concerns that loan disbursements could be funneled into additional Bitcoin purchases rather than essential fiscal reforms.The “Anchor” Risk: Analysts from T. Rowe Price and William Blair warn that if the IMF anchor is removed, bond markets could react poorly. El Salvador’s bonds have historically been a standout turnaround story, returning over 130% in three years, but that progress is now jeopardized by the lack of a finalized pension system analysis and continued BTC accumulation. Debt Deadlines: Navigating a $450M Bond Payment El Salvador’s repayment capacity is under intense scrutiny as global markets monitor its credit default swaps (CDS). Upcoming Obligations: The country faces $450 million in bond payments in 2026, with that figure set to rise to nearly $700 million in 2027.Rising Anxiety: The five-month high in CDS reflect investor fear that the combination of Bitcoin losses and a potentially canceled IMF program could lead to a liquidity crunch. The March review with the IMF is now viewed as a “make-or-break” moment for the nation’s financial credibility in emerging markets. Essential Financial Disclaimer This analysis is for informational and educational purposes only and does not constitute financial, investment, or legal advice. Reports of El Salvador’s $300 million Bitcoin portfolio loss and the status of IMF loan negotiations are based on official government data and third-party financial analysis as of February 13, 2026. A “paper loss” does not represent a realized capital depletion unless the assets are sold. Bitcoin is an extremely volatile asset; nation-state adoption involves significant geopolitical and fiscal risks. Sovereign debt investments, including El Salvador’s bonds, are high-risk and subject to default based on the outcome of IMF reviews and global market conditions. Always conduct your own exhaustive research (DYOR) and consult with a licensed financial professional before making significant investment decisions in sovereign debt or digital assets.

Will Bukele’s “buy the dip” strategy pay off in the long run, or is the $300M loss a warning that nation-states shouldn’t gamble with national reserves?