On February 25, 2025, the price of Bitcoin fell below $89,000. This fall is its lowest since November 2024 and is considered a critical point.
The decline parallels the recently increased market volatility and institutional rebalancing. Nevertheless, after a week off, El Salvador has started buying Bitcoin again. Despite growing macroeconomic pressures, the country bought 7 BTC, or about $661,000, showing its continued dedication to its Bitcoin policy.
Bitcoin Price Decline Amid Institutional Rebalancing
Market hesitancy brought on by changes in investor attitude and ETF withdrawals is what caused Bitcoin’s price decline.
Standard Chartered analysts caution that prices may drop to the “low 80s” before leveling off. Weak demand from institutional and ordinary investors is the cause of this forecast.
This price decline has caused institutional players to rebalance their portfolios, increasing selling pressure. Arthur Hayes, co-founder of BitMEX, also speculated that Bitcoin’s price could fall to $70,000 if bearish momentum continues.
El Salvador’s Strategy in Bitcoin Purchases
El Salvador’s latest acquisition of 7 BTC marks its first purchase since pausing its daily Bitcoin buying program on February 18, 2025.
The nation usually purchases 1 Bitcoin per day for its reserve. Currently, it holds 6,088 BTC, which is valued at approximately $558 million at current prices.
The recent purchase follows a pattern of strategic accumulation during price dips.
The government bought 12 bitcoins at an average price of $101,816 each in early February 2025, and then added another bitcoin at a price of $99,114. El Salvador has strengthened its position as one of the biggest sovereign holders after acquiring 60 Bitcoins in the last month.
The acquisition took place in spite of a deal reached in December 2024 with the International Monetary Fund (IMF), which agreed to scale back some Bitcoin rules in exchange for a $1.4 billion loan.
But the administration of President Bukele has stuck to its long-term goals, making El Salvador a global leader in adoption.
Market Reactions and Future Outlook
El Salvador’s aggressive acquisition strategy has drawn mixed reactions. Critics like economist Peter Schiff argue that Bitcoin’s limited transactional use undermines its value proposition.
However, the nation’s $554 million reserve will be a potential long-term growth asset and a hedge against currency devaluation.
Standard Chartered analysts project that the price of Bitcoin could reach $500,000 by 2028.
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