[Bitcoin Now] IMF Issues Warning to El Salvador, Causing Over 2% Plunge

[Asia Economy Reporter Ji Yeon-jin] Bitcoin prices have plunged more than 2% in a single day.

As of 11:02 AM on the 27th, Bitcoin is trading at 44,133,000 KRW on Upbit, down 2.14% (967,000 KRW) compared to the previous day.

This is interpreted as a reaction to the International Monetary Fund (IMF) officially warning El Salvador, the Central American country that adopted Bitcoin as legal tender, on the 25th (local time).

In a statement that day, the IMF urged the El Salvador government to exclude Bitcoin from legal tender, saying, "Adopting cryptocurrency as legal tender entails significant risks to market soundness, financial stability, and consumer protection."

Naive Bukele (40), the President of El Salvador who champions Bitcoin, adopted Bitcoin as legal tender alongside the existing official currency, the US dollar, in September last year, making it the first country in the world to do so. In November last year, President Bukele also announced plans to mine Bitcoin using geothermal energy from volcanic areas and to issue $1 billion worth of Bitcoin bonds to build a "Bitcoin City."

Despite negative public opinion domestically, the El Salvador government has directly purchased over 1,800 Bitcoins on multiple occasions. Treated as a risky asset, Bitcoin has recently traded around $36,000, nearly half the peak price from November last year amid increased stock market volatility. Bloomberg estimates El Salvador's investment losses could reach $20 million (approximately 2.4 billion KRW).