El Salvador has been planning to issue the world’s first bitcoin bond for a while. The move received a lot of interest from industry investors who were looking to take advantage of this unique opportunity. However, the launch of the bitcoin bond has been postponed for the second time. El Salvador’s financial astrologer, Alejandro Zelaya, gives the reason for the multiple delays.
Not a good time
Minister of Finance He said it wasn’t the right time To launch bitcoin bonds in El Salvador. This is due to the fact that the price of Bitcoin was on the decline and thus did not provide a suitable time for the launch of Bitcoin bonds. It’s starting to anger some in the space because this isn’t the first time the country has delayed the launch of the infamous Vulcano Bonds, also known as bitcoin bonds.
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The first time was in late March when the government of El Salvador announced that it had to delay the launch. The reasons for the postponement were as they are now. The financial market was not in a good place to launch. Bringing an untested bond into the market at a time of great geopolitical turmoil might make such a bond successful.
Finance Minister Alejandro Zelaya explained that the move to postpone the launch again was “due to the price [of bitcoin]. The price is still held up due to the war in Ukraine. There have been many movements in the stock market.”
On the flip side, it is argued that the postponements were not due to geopolitical turmoil and low prices. Instead, interest in these bitcoin bonds has been low. This is because investors are not willing to bet their money on an untested bond that does not promise quick returns.
Although no official date has been announced for when the Bitcoin bond issue will be issued, the minister stated that the “currency is strong” and continues to recover.
Bitcoin in El Salvador
El Salvador has been buying bitcoin since last year when it made the cryptocurrency legal tender. During the time the country started buying bitcoins, it was trading at one of the highest points of the year. As such, with the recent drop in the value of BTC, El Salvador is finding itself at a loss when it comes to its bitcoin holdings.
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However, the country remains steadfast in its determination to incorporate bitcoin into its treasury. The finance minister said the government is continuing to hold on to its bitcoin despite losses of $38 million. According to him, since they did not sell anything, the country “did not lose” any money.
However, Zelaya revealed that El Salvador has already “traded” some of its bitcoins to build the Chivo Pet but the coins are still in their possession. At the time of writing, El Salvador owns 2,301 with a value of nearly $70 million.
Featured image from Bitcoinist, chart from TradingView.com
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