President Nayib Bukele said that the country is still fully committed to its Bitcoin strategy. Meanwhile, the debate over the proposed US Crypto Strategic Reserve recently intensified, with Bitcoin advocates arguing that BTC should be the sole asset included, while others support a multi-crypto reserve that includes altcoins like XRP, ADA, and SOL. At the same time, Bitcoin mining stocks are under pressure due to falling BTC prices and reduced profitability after the April halving, which is pushing miners to explore alternative revenue streams like AI computing. El Salvador Will Not Stop Buying Bitcoin El Salvador’s President Nayib Bukele reaffirmed his commitment to accumulating Bitcoin despite the renewed pressure from the International Monetary Fund (IMF) to stop purchases. In response to a new IMF request that was issued on March 3 as part of a $1.4 billion funding arrangement, Bukele made it very clear that his government will continue buying Bitcoin, and stated in a March 4 post on X , “No, it’s not stopping.” He also pointed out that El Salvador maintained its Bitcoin strategy even when it faced global criticism and when many Bitcoin supporters abandoned the country. As part of its ongoing treasury strategy, El Salvador continued its daily Bitcoin purchases on March 4. The IMF’s latest memorandum also called for the country to cease Bitcoin mining activities and to limit public sector issuance of debt or tokenized instruments linked to Bitcoin. While Bukele made it evident that Bitcoin accumulation will persist, it is still uncertain whether El Salvador will comply with other aspects of the IMF’s request. El Salvador initially secured the $1.4 billion funding deal with the IMF in December of 2024, agreeing to scale back certain Bitcoin-related initiatives in return. This included making Bitcoin payments voluntary and requiring tax payments to be made in US dollars. Despite these adjustments, the country continued its Bitcoin purchases and currently holds about 6,101 BTC, which is valued at approximately $534.5 million. Data from the National Bitcoin Office indicates that El Salvador has the sixth-largest Bitcoin treasury among nation-states, following the United States, China, the United Kingdom, Ukraine, and Bhutan. (Source: BitBo ) El Salvador began its Bitcoin accumulation in September of 2021, when it became the first country to recognize Bitcoin as legal tender . However, its status was slightly adjusted in January 2024 when a new law made Bitcoin acceptance voluntary for private sector merchants, rather than mandatory. Bitcoin Advocates Reject Trump’s Crypto Reserve Plan Other Bitcoin maximalists are also not giving up on Bitcoin. The debate over which cryptocurrencies should be included in the proposed US Crypto Strategic Reserve recently intensified, with the CEOs of Coinbase and Gemini arguing that Bitcoin is the only digital asset that meets the necessary criteria. After an announcement from US President Donald Trump outlining plans to establish the reserve, Gemini co-founder Tyler Winklevoss said in a March 3 post on X that Bitcoin is the only cryptocurrency suitable for the role. He clarified that while he has no issue with other assets like Solana, Cardano, and XRP, they do not qualify as hard money or a proven store of value in the way Bitcoin does. Coinbase CEO Brian Armstrong agreed with Winklevoss’s stance, and stated that Bitcoin is the simplest and most viable option, likening it to gold. However, he also suggested that if the US government is determined to include multiple assets, a market cap-weighted index of cryptocurrencies could provide a more neutral approach. Cameron Winklevoss , Tyler’s twin and Gemini’s other co-founder, expanded the discussion by suggesting that Ethereum could also be a valid addition to the reserve as digital oil alongside Bitcoin’s role as digital gold. He also argued that if the US wants to accumulate XRP, ADA, and SOL, it should stockpile them rather than actively purchase them on the open market. Jan3 CEO Samson Mow took the discussion a step further by saying that only proof-of-work-based cryptocurrencies should be included in the reserve. He believes that assets like Bitcoin and Litecoin offer fundamental integrity because of their reliance on proof-of-work, whereas proof-of-stake tokens could be compromised by foreign actors simply through ownership. Despite pushback from Bitcoin advocates, executives from Cardano and Ripple supported Trump’s decision to consider a diverse selection of cryptocurrencies for the reserve. When well-known Bitcoin proponent Peter Schiff questioned the inclusion of XRP, Cardano founder Charles Hoskinson defended it by pointing out its resilience, strong community, and its establishment as a global standard over the past decade. Ripple CEO Brad Garlinghouse also long championed the idea of a multi-token reserve. The Crypto Strategic Reserve plan was announced after extensive evaluation by the President’s newly formed Working Group on Digital Assets. Trump is set to host the first White House Crypto Summit on March 7, where industry leaders will meet with Bo Hines and Trump’s AI and crypto policy lead, David Sacks. Bitcoin Prices Weigh on Mining Stocks Despite the support Bitcoin is receiving from its supporters, Bitcoin mining stocks are facing a lot of pressure as declining cryptocurrency prices and the impact of the April halving continue to strain business models. A recent JPMorgan research note revealed that mining stocks collectively lost 22% of their market capitalization in February, with companies like Riot Platforms, Bitdeer, Marathon Digital, and Core Scientific experiencing post-earnings declines despite some reporting better-than-expected revenues. The April 2024 halving event reduced Bitcoin mining rewards from 6.25 BTC to 3.125 BTC per block, which had a huge impact on miners' profitability. Since the event, mining revenues have dropped by an average of 46%, while gross profits have fallen by 57%. The decline in Bitcoin’s price only exacerbated these losses, leading to a 9% drop in gross profits in February alone. Broader macroeconomic concerns, including fears of a trade war sparked by President Donald Trump’s 25% tariffs on Canada and Mexico, also rattled markets by adding another layer of uncertainty for mining companies. (Source: JPMorgan) Despite these challenges, miners are looking for alternative revenue streams, including leasing high-performance computing hardware to artificial intelligence models and selling specialized ASIC microchips. However, even those expanding into AI-related businesses are facing setbacks. According to JPMorgan, concerns about demand for data center capacity have weighed on operators with AI exposure. The announcement from Chinese AI company DeepSeek, claiming its models can rival OpenAI’s ChatGPT at a fraction of the cost, fueled doubts about near-term demand in the AI sector. While mining stocks have struggled, companies with larger AI exposure like Hut 8, continue to trade at higher valuations than their peers. However, ongoing uncertainty in both the cryptocurrency and AI sectors suggests that miners will need to adapt very quickly to navigate the current landscape.
