Aside from postponing the issuing of Bitcoin bonds, the Salvadoran government appears to have reduced the purchase rate of Bitcoin. Due to poor market circumstances exacerbated by the geopolitical situation, El Salvador’s government has chosen to postpone the issuance of a Bitcoin (BTC)-backed bond.
According to Finance Minister Alejandro Zelaya, who talked to a local television station, El Salvador’s “Volcano Bond” will not go live in March, as the Salvadoran government had anticipated.
The delay, according to Zelaya, was due to the unpredictable price of Bitcoin; it fluctuated due to the Russia-Ukraine issue. He went on to say that the government of El Salvador had opted to wait for favorable financial market circumstances, estimating September at the earliest, and that: “It’s not the right moment to issue the bond right now […] The market variations in May and June are a little different. In September, at the very least. If you go out to the foreign market after September, it will be tough to get cash.”
BTC Fluctuations and Outlook
According to statistics, Bitcoin is currently trading at $42,236, up roughly 10% in the last 30 days. Salvadoran government initially announced plans for Bitcoin bonds in November. However, the cryptocurrency has lost nearly half of its value since its announcement. Last week, Zelaya hinted at a possible postponement of El Salvador’s Bitcoin bond; according to him, one of the key reasons for the delay is the world’s volatile political situation.
The $1 billion Bitcoin bond go live in mid-March. In early February, El Salvador Congressman William Soriano said on Twitter that the Bitcoin bond would be live in the second or third week of March. President Nayib Bukele of El Salvador first announced plans for the bond in November 2021. The bond is said to have a 6.5 percent yield; moreover, it has a Bitcoin payout of 50% of the increase in the cryptocurrency’s price after five years.