El Salvador was one of the very first countries to jump the gun and hop on the Bitcoin bandwagon. This eventually came to bite the crypto-dependent country in the ass as investors aren’t flocking to the sound of their Bitcoin bonds and the offering actually hasn’t sold to a single buyer. This is all according to Bloomberg.

President Nayib Bukele has received skepticism from the IMF as he is publically seeking $1 Billion for the crypto-backed bond. This isn’t the first line of IMF criticism as they previously criticized the president when he was making Bitcoin legal tender. They even went as far as to call on the country to reconsider its reliance on digital currency.

Conventional bonds due in 2023 yield 24% for El Salvador. If you’re attuned to common knowledge, this means that markets are perceiving the country’s debt as high risk and prepare for the effect of default. Data shows that yields on the country’s conventional bonds have fallen further than every other country (outside of those heavily affected by the Ukrainian war).

The nation’s dollar debt hit an all-time low when the idea of Bitcoin bonds was first introduced in El Salvador. However, in February, Fitch Ratings used the basis of increased dependency on short-term debt and limited financing sources to cut El Salvador’s rating to CCC. No need to worry however, the finance minister of El Salvador has claimed there is “zero risk” of a default occurring. We can trust him - no worries!

Bukele said in November that half of the $1 Billion raised for Bitcoin bonds would be used to add more Bitcoin to El Salvador’s asset sheet. The other half was promised to be used for energy and mining infrastructure surrounding Bitcoin. With all of these promises, however, investors have grown concerned as to whether El Salvador will be able to keep up with current bond payments.

The future of El Salvador’s cryptocurrency dependency is up in the air with everybody watching…