The annual return on El Salvador’s dollar bonds has averaged 70%. Top investors include JPMorgan Chase & Co. and Eaton Vance.
Huge progress has been made in El Salvador’s effort to quicken the pace of economic expansion. Businesses in the Latin American nation will have to start accepting Bitcoin (BTC) as payment in 2021 since the government has decided to make Bitcoin (BTC) legal money that year.
The government of El Salvador has written a geothermal energy project that would make Bitcoin mining more efficient because of the country’s natural energy resources. At the same time, pro-Bitcoin President Nayib Bukele got rid of all taxes on IT businesses, including the cryptocurrency industry.
Volcano Bonds are the first Bitcoin bonds, thus the name. They were authorized by the Legislative Assembly of El Salvador. The Volcano Energy Project is expected to have a mining capacity of 241 MW (megawatts), and these bonds provide international investors access to the project.
Furthermore, the prominent stablecoin issuer Tether (USDT) is among the primary investors in the $1 billion Volcano Energy project. In June, the Volcano Energy team announced its plans to expand into the Bitcoin mining industry with a well-thought-out whitepaper.
Bloomberg reports that critics on Wall Street are being won over by the rising profitability of El Salvador’s foreign dollar bonds. The research strategists at JP Morgan said that they wished they had invested in El Salvador’s dollar bonds sooner. Although the investors lost out on “a significant share of the rally,” they believed “there is value across El Salvador’s curve, there is room for this credit to keep outperforming” in a note they released in July.
El Salvador bonds have returned 70% APY since this time last year, attracting investors such as JP Morgan, Eaton Vance, and PGIM Fixed Income. When El Salvador repaid its maturing $800 million in debt in January 2023, the market’s perception of the nation changed. Bukele’s administration quickly engaged an IMF senior adviser to end the conflict and ensure that the country’s finances were in line with international norms.
Wallets