Crypto Exodus to El Salvador 🇸🇻
Happy Thursday, Dispatchers!
Today we're diving into what might be one of the most fascinating and least understood stories of 2025 — El Salvador's transformation into crypto's newest powerhouse.
We are looking at
Why the world's third-largest cryptocurrency is abandoning the British Virgin Islands for El Salvador
How a $1.3 billion IMF negotiation sparked an unexpected pivot
The fascinating web connecting Trump's crypto ambitions, his VP's investments, and Bukele's grand plan
What happens when a Bitcoin maximalist nation decides to think bigger
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2021— When El Salvador made Bitcoin legal tender, the crypto world lost its collective mind. Critics called it a disaster waiting to happen.
Bitcoin maximalists hailed it as the dawn of a new monetary era.
And the IMF... well, the IMF just gritted its teeth and started drafting strongly worded letters.
Three years later, something unexpected is happening in this small Central American nation.
While everyone's been obsessing over Bitcoin ETFs and Trump's return to the political stage, El Salvador has been orchestrating what might be an intriguing pivot in crypto history.
The country that once mandated Bitcoin acceptance is now doing something far more nuanced — and potentially far more profitable.
Crypto companies are moving to El - Salvador.
A carefully orchestrated transformation that could turn this former Bitcoin maximalist nation into crypto's newest (and most strategic) financial hub.
And it all started with a $1.3 billion negotiation that nobody saw coming...
The Great Compromise
For years, El Salvador's crypto identity has been synonymous with one thing: its unwavering commitment to Bitcoin.
6,029 BTC
That’s El Salvador's current Bitcoin holdings—worth $599 million.
More impressively, they're up 117% on their investment, having bought at an average price of $45,750.
Not bad for a country that was supposedly making a catastrophic financial mistake.
When Nayib Bukele, the country’s president first made Bitcoin legal tender, the International Monetary Fund was, to put it mildly, not impressed.
The organisation, which has historically wielded significant influence over developing economies through its lending programs, saw Bitcoin adoption as a threat to financial stability.
The stakes were high: El Salvador needed a $1.3 billion loan package from the IMF.
But for four years, negotiations stalled.
The primary sticking point? The country's aggressive Bitcoin stance, particularly its law requiring all businesses to accept Bitcoin as payment.
The IMF's concerns weren't entirely unfounded.
A 2024 study showed only 7.5% of El Salvador's population actively used Bitcoin for transactions, despite the mandatory acceptance law.
The implementation costs were substantial, including the development of the state-run Chivo wallet and nationwide Bitcoin ATM network.
What’s interesting?
By late 2024, something had to give.
El Salvador needed the IMF loan, but Bukele — fresh off re-election and sitting on paper profits from his Bitcoin strategy — wasn't about to abandon crypto entirely.
Instead, he orchestrated what might be the most clever pivot in crypto history:
Bitcoin acceptance would become optional rather than mandatory
The state-run Chivo wallet would be wound down
Government Bitcoin purchases would continue, but more strategically
A new focus would emerge on broader crypto infrastructure
This wasn't capitulation — it was transformation.
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The Migration Machine
El Salvador's rapid transformation into a crypto hub comes now — just as the country appears to be softening its Bitcoin stance.
But appearances can be deceiving.
The Tether Effect
When Tether announced its relocation to El Salvador in January 2025, it wasn't just another corporate reshuffle.
This is the world's third-largest cryptocurrency by market cap — a $140 billion behemoth that facilitates a significant portion of all crypto trading — choosing to leave the British Virgin Islands for Central America.
The move came with significant baggage.
Tether has faced its share of scrutiny — from an $18.5 million settlement with New York state in 2021 to ongoing questions about its reserves. Yet El Salvador welcomed them with open arms, granting a coveted Digital Asset Service Provider license.
Why? Because Tether brings more than just its headquarters — it brings an entire ecosystem.
Tether is not alone.
Bitfinex Derivatives (a long-time Tether ally) swapped its Seychelles address for El Salvador, securing its own DASP license. Their stated goal? To help transform El Salvador into "a financial services centre for Latin America."
Bitget followed suit with a Bitcoin Service Provider license, signalling their intent to offer a full suite of crypto services in the country.
And now enters Rumble?
Yes, the right-leaning video platform that recently received a $775 million investment from Tether.
Nayib Bukele encouraged Rumble CEO Chris Pavolvski to relocate.
This isn't just any tech company — it's one backed by some of the most influential figures in American tech-politics:
Peter Thiel (PayPal co-founder)
JD Vance (Trump's vice president-elect)
A 2021 funding round that valued it at $500 million
Now, after allocating part of its reserves to Bitcoin and receiving Tether's massive investment, Rumble is eyeing El Salvador as its potential new home.
The Infrastructure Play
El Salvador is building an entirely new financial infrastructure. The National Commission of Digital Assets has already inked agreements with Argentina's National Securities Commission and is in talks with 25 other nations.
Each agreement opens new corridors for:
Cross-border digital asset trading
Regulatory harmonisation
Technology transfer
Market access expansion
The Trump Paradox
The same President-elect Trump who criticised Bukele at the Republican National Convention ("sending all his criminals to the US") is now positioning himself as crypto's greatest ally.
He's openly planning to make America the world's crypto capital, and has a DeFi project of his own called World Liberty Financial project, backed by Justin Sun's $30 million investment.
Yet the companies moving to El Salvador include some with deep connections to Trump's own circle.
Consider Rumble's potential move. This isn't just another tech company — it's backed by Trump's own Vice President-elect JD Vance through Narya Capital. Peter Thiel, one of Trump's earliest supporters, is also an investor. Now, after the Tether investment, they're eyeing El Salvador as a potential home.
This creates a fascinating dynamic:
Trump wants to make America crypto's home.
His VP's backed company might move to El Salvador.
Bukele's maintaining diplomatic silence.
The IMF's stuck in the middle.
And we are eagerly waiting to see how this whole thing plays out.
Since January 2023, El Salvador has been methodically building something far more ambitious than a Bitcoin-only economy. Through a series of calculated moves, it's laying the foundation to become Latin America's premier crypto financial center:
The Digital Asset Securities Law created a comprehensive framework for tokenised securities
A new regulatory body, the National Commission of Digital Assets, was established
A sophisticated licensing system for crypto companies was implemented
Cross-border partnerships with over 25 countries are being negotiated
And now, the results are starting to show...
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Not random corporate relocations.
We see a calculated ecosystem being built. Each company brings its own piece to the puzzle:
Tether: The liquidity backbone
Bitfinex: The trading infrastructure
Bitget: Retail services
Rumble: Content and media presence
The scale of what's at stake becomes clear when we dig into the numbers:
Tether's daily trading volume: ~$127 billion (more than many traditional stock exchanges)
Rumble's user base: 350 million (larger than the population of the United States)
Bitfinex's trading volume: $330 million
Plus, El Salvador's potential reach through partner countries
El Salvador is positioning itself not just as a home for these companies, but as the regulatory bridge between Latin America's emerging crypto economy and the global financial system.
For El Salvador, this political complexity adds another layer to an already ambitious play. They're not just building a crypto hub — they're doing it while:
Navigating Trump's America First crypto agenda
Managing IMF demands
Attracting Trump-aligned companies
Maintaining diplomatic balance
If Trump succeeds in making America crypto-friendly, does that undermine El Salvador's hub ambitions? Or does it validate them?
Perhaps that's the wrong question. Maybe what we're watching isn't a competition between nations but the emergence of a new kind of financial system — one where El Salvador's first-mover advantage matters more than size or traditional power.
After all, in crypto, being first often matters more than being biggest.
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