Bitcoin-friendly El Salvador sees bond returns soar to 70% in 2023
El Salvador, which adopted Bitcoin as legal tender in 2021, has seen its dollar bond outperform the majority of the emerging markets with a 70% return in 2023. The massive rally of the bond has now drawn interest from several institutional giants like JP Morgan, Eaton Vance and PGIM Fixed, prompting President Nayib Bukele to say, “I told you so.”
Apart from the institutional giants, the likes of Lord Abbett & Co LLC, Neuberger Berman Group LLC and UBS Group AG have also added debt security since April, reported Bloomberg.
Paolo Ardoino, chief technology officer of Bitfinex, told Cointelegraph that the performance of El Salvador bonds is a clear signal that investors are supportive of the financial policies of the El Salvador government and demonstrates the renewed interest in investing in the El Salvador story while adding:
The growing demand for El Salvador’s debt security in 2023 is quite a contrast to its performance a couple of years ago when it first adopted Bitcoin as a legal tender. The BTC adoption created uncertainty among investors who bet against the country’s bonds, with several financial agencies casting a shadow of doubt on the country’s financial future.
In Feb 2022, the American credit rating industry Fitch, lowered the country’s long-term Issuer Default Rating from B- to CCC, citing policy uncertainty and the Bitcoin adoption along with an $800 million debt payment due for January 2023.
Related: El Salvador’s Bitcoin strategy evolved with the bear market in 2022
El Salvador paid $800 million in debt in full within the due maturing time at the start of this year, raising confidence in the country’s bonds again. President Nayib Bukele at the time noted that they have proven every finance pundit wrong,
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