Contrary to all prediction, El Salvador’s bonds rise 60% by 2023

In 2023, El Salvador, recognized as the inaugural nation to adopt Bitcoin as legal tender, witnessed a 60% increase in its bonds.

This development occurred concurrently with Bitcoin’s 75% surge within the same year.

Despite concerns from credit rating firms and the U.S. government about El Salvador’s adoption of the highly volatile Bitcoin, the nation has successfully defied predictions of a debt default.

Specifically, in January 2023, El Salvador fulfilled its commitment by paying off US$800 million of short-term debt, including interest.

This happened after Fitch Ratings’ downgrade of the country’s credit rating in September 2022 and their debt default forecast.

El Salvador uses bonds to manage its debt, supporting administrative expenses. Refinitiv data reveals that the country’s bonds currently yield between 14% and 18%.

Nathalie Marshik of BNP Paribas acknowledged El Salvador’s distinctive position as one of the highest-yielding performing troubled credits.

Additionally, El Salvador’s integration of Bitcoin into its national treasury strategy has led to several cryptocurrency initiatives, including Bitcoin mining using geothermal energy.

The nation presently holds 2,546 BTC, equivalent to about US$76.6 million.

While the country’s Bitcoin adoption has reportedly been challenging for locals, it has attracted tourists to the nation’s Bitcoin Beach.