The Central American country of El Salvador, the first country in the world to declare bitcoin legal tender, now has more than $340 million in bitcoin, according to Arkham Intelligence, TheStreet.com reported. The country has been gradually accumulating new bitcoin at a rate of approximately one bitcoin a day since March, indicating the country may scoop up over 100 bitcoins by the close of 2024. The country’s current bitcoin reserves stand at 5,856 bitcoin, reflecting holdings of $344 million in cryptocurrency based on current bitcoin prices.
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El Salvador
El Salvador returned to global debt markets with an offering that will pay investors a higher interest rate if the government fails to win credit upgrades or a deal with the International Monetary Fund, Bloomberg News reported. The Central American nation priced $1 billion in debt due in 2030 at 89.923 cents on the dollar to yield 12%, according to people familiar with the matter. The coupon is 9.25%, they said, and the note amortizes starting in 2028. The deal includes an additional interest-only security tied to nation’s credit score or an IMF deal.
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James and Nicki Malcolm moved to El Salvador from New Zealand to be part of a bitcoin dream sold by President Nayib Bukele in 2021 when he made the Central American nation the first in the world to accept the cryptocurrency as legal tender, Reuters reported. Months later Bukele sketched his plans for Bitcoin City, a tax-free crypto haven powered by geothermal energy from a volcano, to a sea of enthusiasts at a beach club presentation that included an avatar of himself on a spaceship.
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El Salvador’s credit rating was upgraded by S&P Global Ratings, which cited the government’s effort to rework its short-term, local debt obligations, Bloomberg reported. S&P raised the Central American nation’s debt rating to B- from CCC+ on Tuesday, putting it six levels into junk and on par with Ecuador and Nigeria. The outlook is stable. “The government’s recent program to gradually refinance its short-term debt with local banks will reduce rollover needs and mitigate the risk of a default over the next two years,” analysts led by Patricio Vimberg wrote.
An agreement between El Salvador and a group of private local banks to reprofile its short-term debt has helped extend a stellar rally in its international bonds, which have returned more than 90% this year, Reuters reported. The government announced last week that it accepted the proposal by eight private banks to extend the maturities of short term local bills into new two, three, five and seven year notes. The size of the operation is approximately $1.45 billion, the finance ministry told Reuters.
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A public-private partnership in El Salvador will pump $1 billion into creating one of the world's largest bitcoin mining farms, the group called Volcano Energy announced on Monday, Reuters reported. The project will start with an initial $250 million, backed by "key Bitcoin industry leaders" in collaboration with renewable energy developers, Volcano Energy said in a statement. El Salvador's state "Bitcoin Office" retweeted the news on its Twitter. The presidential office did not immediately respond to a request for comment.
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El Salvador has tapped a former International Monetary Fund official as an adviser as it seeks a deal with the multilateral lender, Bloomberg News reported. Alejandro Werner, who retired as head of the Western Hemisphere Department at the IMF in 2021, has been working with the Central American nation’s government this year. President Nayib Bukele’s government has struggled to secure an extended fund facility agreement with the IMF, which has warned repeatedly against the risks of using Bitcoin as legal tender.
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Two New Yorkers who created a popular financial news show on Russian state television and cashed in on the crypto boom have emerged as key advisers to the Salvadoran government on its adoption of bitcoin, according to a WSJ Pro Bankruptcy analysis. Max Keiser and Stacy Herbert are also investing in bitcoin ventures in the Central American country and are founding backers of a crypto exchange that is helping manage El Salvador’s sovereign debt sale that is linked to bitcoin.
El Salvador’s Bitcoin-touting government is poised to deliver on a $604 million bond maturing this week, in a turn of events that leaves investors in distressed emerging-market debt with only one more big maturity to worry about this year, Bloomberg News reported. The Central American nation is widely expected to repay creditors on Tuesday after receiving a last-minute loan and undertaking two bond buybacks. The maturing note, which now hovers at about a penny below par, has soared by a whopping 34 cents from an all-time low in July.
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El Salvador’s President Nayib Bukele has pledged to buy Bitcoin at a pace of one coin per day starting Friday, November 8, Tokenistcom reported. The move comes as the flagship cryptocurrency has tumbled to two-year lows amid the recent collapse of cryptocurrency exchange FTX. In a Thursday tweet, President Nayib Bukele announced that they will start buying one BTC per day. “We are buying one Bitcoin every day starting tomorrow,” he said. However, the Bitcoin bull did not identify a cap for how many BTC coins he plans to acquire or for how long they will stick to the strategy.
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