El Salvador decided to postpone the offering of its $1 billion bond last week, citing unfavourable market conditions.
El Salvador’s finance minister Finance Minister Alejandro Zelaya announced on Tuesday the country will not be moving forward with its planned bitcoin bond debut originally scheduled for March 15-20, due to heightened volatility across cryptocurrency markets in response to the Russia-Ukraine conflict.
“I think this is not the time. There are some moves on the planet,” he said, adding that the ideal time for the issuance is in the first half of the year. Since reaching a record-high of $67,500 back in November, bitcoin has shed almost half of its value, and is currently trading at around $42,680 at the time of writing. As a result, the country’s government will likely postpone the bond’s issuance until sometime in September. But, according to Zelaya, the bond is expected to have a “substantial oversubscription,” potentially reaching $1.5 billion.
Back in November, El Salvador President Nayib Bukele announced plans to construct a “Bitcoin City” using money fundraised from the sale of the bonds, which earn holders an annual coupon rate of 6.5%. Half of the funds are earmarked for additional bitcoin purchases, while the other half will be allocated towards building infrastructure for bitcoin mining, which would be powered by geothermal energy.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
