Could Bitcoin crash make El Salvador go BUST? Government has already lost $40m amid plans to build crypto city
- The crypto losses are equal to Central American country's next bond payment
- President tweeted plans for a Bitcoin-powered smart city on Tuesday
- El Salvador became the first country to accept Bitcoin as legal tender last year
- Bond markets doubt the country's ability to service its debts due to the losses
El Salvador's Bitcoin bet could be putting the country in peril as its holdings have already lost $40m amid a cryptocurrency rout.
The losses - equal to the Central American country's next bond payment - come amid a so-called 'crypto winter' and the president's plans to build a volcano-powered 'crypto city' to mine bit coin.
President Nayib Bukele announced in September that El Salvador would become the first country in the world to accept Bitcoins as legal tender and forked out $105 million on the digital currency.
But since then its value has fallen 45% amid a general bursting of the crypto bubble, slicing the value of the 2,301 Bitcoins bought by state coffers down to $66 million.
The decision to make Bitcoin legal tender has nonplussed bond investors, who see it as exposing the state coffers to the volatility of the crypto market and thus hitting the country's ability to make bond payments.
'It's risky because it's an extremely volatile asset, and it's an investment that is totally at the discretion of the president,' Bloomberg report former El Salvador Central Bank Chief Carlos Acevedo as saying.
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https://www.dailymail.co.uk/news/ar...vt-lost-40m-amid-plans-build-crypto-city.html
