Bonds In El Salvador’s Market Struggle To Thrive Following Bitcoin Law
The ongoing bitcoin adoption in El Salvador seems to be causing a lot of issues. But, for now, it seems to be the turn of Bond investors. The yields have recently spiked as investors show signs of uncertainty on what the economy holds in store. According to a Bloomberg report, the bonds yield curve has […]
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Bond investors appear to be betting against El Salvador’s controversial Bitcoin Law, but other factors need to be taken into account. El Salvador’s move to embrace Bitcoin has ruffled the feathers of bond investors, with yields spiking as investors signal uncertainty for the emerging economy.A Sept. 8 report published by Bloomberg notes the yield curve on El Salvador’s bonds has recently inverted, meaning bonds with short-term maturities are now yielding more than is due from the instruments. It stated:“That’s generally considered a bad sign as it means investors see shorter-term debt as....
Investors have grown weary of El Salvador’s dollar debts as the country further adopts Bitcoin, meanwhile the IMF has recommended that BTC not be used as legal tender. El Salvador’s dollar-denominated bonds have fallen to an all-time low as the Central American nation’s debt started trading in "distressed territory" this week. El Salvador’s USD bonds fell to 64.4 cents to the dollar on Monday, Nov. 22, following the weekend news that the Central American country would use Bitcoin (BTC) bonds to fund its Bitcoin City initiative. Dollar bonds have fallen steadily since April 2021 when they....
The government has repeatedly announced that its “volcano bonds” would launch by March 20, but it has apparently failed to deliver. Considering the absence of any official announcements, El Salvador’s government seems to have delayed the launch date of the so-called “volcano bonds.” Earlier, Salvadoran Finance Minister Alejandro Zelaya had been reassuring the public that the project would start by March 20. Speaking on a local TV show on Friday, El Salvador’s finance minister once again announced that the launch of so-called “volcano bonds” should take place somewhere between March 15 and....
The Telegraph’s latest hatchet job on El Salvador’s bitcoin strategy is right on the money. In a hilarious twist of events, mainstream media’s latest attack on the volcano bonds makes the case for bitcoin in all its glory. Everything that the article “The world should fear El Salvador’s bizarre Bitcoin experiment” implies is exactly the […]
Will the plan work? Soon, the Bitcoin Bonds will get the legal foundation they need. In a recent TV interview Alejandro Zelaya, El Salvador’s Finance Minister, said they will send the necessary bills to Congress. Soon. Reportedly, El Salvador will initially issue $1B worth of bonds, which will have a ten-year maturity and carry a 6.5% coupon. The bitcoin that backs them will be locked for five years. The project, announced by President Bukele at Labitconf 2021, includes plans to build Bitcoin City. More on that later. In a scheme worthy of MicroStrategy, El Salvador will spend half of the....