Morgan Stanley, one of the biggest banking giants, advised investors to buy El Salvador’s troubled Eurobonds. El Salvador’s bitcoin plans began in September last year after the country approved the use of bitcoin as legal tender. However, with Bitcoin down around 70% from its all-time highs, the country has not had much success with its plans.
Morgan Stanley advises investors to buy El Salvador’s BTC bonds
Global head of emerging markets sovereign credit strategy at Morgan Stanley, Simon Waever, issued a note to investors on Tuesday saying El Salvador bonds had been affected by market conditions. However, the country was in a better financial position than its peers.
According Bloomberg, the investor note indicated that the markets were taking advantage of the possibility that El Salvador would default on its debts. According to Waever, El Salvador’s debt is unlikely to drop below $0.437 even if the country defaults.
Your capital is in danger.
The note also looked at El Salvador’s ability to repay its obligations over the next year. He said the country could meet its obligations over the next year as it had a primary surplus. Moreover, it had a short period of maturity compared to other countries like Argentina, Ukraine and Egypt facing financial difficulties.
El Salvador’s Bitcoin Plans
El Salvador approved Bitcoin as legal tender in September last year. Shortly after the passage of the Bitcoin Law, Bitcoin entered a strong bull market, reaching an all-time high of $69,000. The country became the first to approve bitcoin as legal tender, and its president, Nayib Bukele, announced new bitcoin-related initiatives.
After bitcoin rallied, El Salvador used the profits for projects such as building a bitcoin school to educate people about bitcoin and a veterinary clinic. However, Bitcoin has now fallen 70% from its all-time high. The country has bought around $56 million worth of Bitcoin since September last year. The country lost much of its investment after the crypto entered a bear market.
Before the bear market set in, El Salvador had announced plans to issue a Bitcoin volcanic bond. The bitcoin bond has been highly publicized by the bitcoin community alongside the country’s plans to build a bitcoin city. However, this obligation has been significantly delayed and there is no specific date for the launch.
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