El Salvador’s President, Nayib Bukele, announced Monday that his country has repaid $800 million on an external bond, despite fears that the government would default owing to its “bitcoin bet” last year.
Investors in the Eurobond have been paid out after the country finished its transfer of funds to international creditors, providing a form of retort to the president’s regime’s critics.
“In the past year, almost every legacy international news outlet said that because of our ‘bitcoin bet,’ El Salvador was going to default on its debt by January 2023,” Bukele tweeted Monday. “Well, we just paid in full, $800 million dollars plus interest.”
El Salvador promised to buy back some of its debt as part of a repurchase plan last year in response to worries that the country might fail.
Eurobonds, which are often issued in another currency, help organizations and countries raise funds for infrastructure projects, among other things. In September, Bukele’s government established a purchase price of $910 for its January 2023 notes and $540 for bonds expiring in 2025, totaling $800 million.
El Salvador became the world’s first country to accept bitcoin as legal cash alongside the USD in September 2021, drawing plaudits from participants and investors in the digital asset market.
The project witnessed the purchase of bitcoin with public funding, as well as the launch of the “Chivo” national digital wallet. The wallet first saw a significant increase due to an offer for people to receive $30 in Bitcoin for signing up.
Despite its initial popularity, major rating agencies and the International Monetary Fund warned against bitcoin’s volatility throughout last year, as concerns about the country’s exposure to the asset class grew following a dramatic market fall in the second quarter.
By May, Bitcoin had dropped more than 50% as a result of Terra’s ecosystem implosion, sending markets into a tailspin and triggering calls from the IMF to overturn El Salvador’s decision. Despite industry headwinds, Bukele’s government has continued to purchase the asset, including a further 80 BTC at $19,000 each in July, just after the market crashed.
Bukele said in November that he would begin purchasing one Bitcoin every day, a dollar-cost averaging method that, if used from the start, would have saved the country millions of dollars.
El Salvador possesses approximately 2,516 BTC worth $57.9 million, down about $51.5 million for $109.5 million, according to NayibTracker, which analyzes the country’s overall holdings as well as the timing of its acquisitions based on Bukele’s tweets.
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