Quantum Threats or Political Theater? El Salvador Splits Its Bitcoin

A Strategic Move or Just Optics?

El Salvador’s government has moved its national Bitcoin stash into new addresses, in what it calls a “strategic initiative to enhance security and long-term custody.” The National Bitcoin Office confirmed the move on X, saying it no longer wanted to keep funds in a single wallet.

The shift comes after months of mixed signals. In July, the International Monetary Fund (IMF) said the country had agreed not to keep buying Bitcoin, even as President Nayib Bukele insisted he was still adding 1 BTC per day. According to Arkham Intelligence, the government currently holds 6,286 BTC worth $686 million at today’s price of $109,204 per coin.

Quantum Computing Cited as Key Risk

In its statement, the Bitcoin Office highlighted quantum computing as a looming danger. It warned that future machines capable of running Shor’s algorithm could break Bitcoin’s cryptography by exposing public keys.

The new setup redistributes funds into wallets holding no more than 500 BTC each. As long as addresses remain unused, their hashed public keys remain safe. Only when funds are spent are public keys revealed, creating the theoretical exposure.

Crypto privacy experts have long advised against storing all coins in one address, noting that distribution reduces systemic risk.

IMF Pressure and Policy Confusion

The timing raises eyebrows. In May, the IMF began releasing parts of a loan package to El Salvador on the condition that it would scale back its Bitcoin policies. By July, IMF representatives were clear:

Yet Bukele’s administration has publicly contradicted that claim. The Bitcoin Office insists the country is still purchasing 1 BTC per day, while the IMF says recent activity is simply fund transfers between wallets.

This disconnect has fueled speculation over whether the redistribution is about transparency and risk management—or a political balancing act to appease both international lenders and domestic Bitcoin supporters.

A Country Still Divided Over Bitcoin

El Salvador made Bitcoin legal tender in 2021, forcing businesses with digital payment capacity to accept it. The state also rolled out a government-backed wallet. While Bukele has touted the move as revolutionary, most Salvadorans remain indifferent, with surveys showing limited daily use.

The president’s popularity instead rests on his anti-gang crackdown, which has dramatically reduced crime rates. Bitcoin adoption, by contrast, has failed to become a major part of daily commerce, despite Bukele’s vision of a crypto-driven economy.

Beyond Security: What’s Next?

Splitting up the reserve into multiple addresses may be smart risk management—but critics argue the government is overselling quantum threats while glossing over IMF restrictions.

Whether it’s genuine foresight or political theater, the move underscores a key point: El Salvador continues to treat Bitcoin as both an economic hedge and a global PR tool. The government now even offers a public dashboard so anyone can track its wallets in real time.

For Bukele, the gamble remains the same: Bitcoin as a long-term national bet, even if the short-term politics are messy.