El Salvador’s bitcoin gambit has heaped fresh pressure on the country’s debt market after investors began selling its bonds earlier this year on rising concerns about the government of President Nayib Bukele.
On the first day of El Salvador’s trailblazing adoption of bitcoin as legal tender, the cryptocurrency’s global price slumped by more than 10 per cent. Undeterred, Bukele tweeted that his small central American nation had increased its holdings. “Buying the dip. 150 new coins added. #Bitcoinday,” he wrote, adding a winking emoji.
Bond traders were not impressed. A fresh round of selling this week pushed the yield on long-dated Salvadoran debt issued in dollars close to 11 per cent while shorter maturities were offering up to 14 per cent. Prior to Bukele announcing the crypto move in June, Salvadoran long-dated yields were around 8.5 per cent.