El Salvador about to default because of Bitcoin

They wanted to be pioneers. But they went too fast, and now they’re at high risk, on high alert. El Salvador is heading for the ‘default’ or non-payment of its debt because of bitcoinbecause it wanted to be the first country in the world to have the famous cryptocurrency as legal tender, but it was not ready for it.

Neither El Salvador, nor any state right now. In September 2022, the small Central American nation became the first in the world to adopt Bitcoin as a major currencys, but linking its economy to it, which already had underlying problems.

Namely, financed it with public money through a trust, but of course, if Bitcoin went down, so would your trust funds. And sadly, it has happened. cryptocurrency has lost half its value in recent months, leaving El Salvador’s credit situation at high risk.

Your bonds in dollars have fallen by 24%, which has put debt agencies on alert. Moody’s has already lowered its rating to ‘Caa3’, with a ‘negative’ outlook, and emphasizing the maturity of the debt that it has to face in January 2023.

A reality check for the ‘CEO’ of El Salvador

Despite the warning from Moody’s and the IMF itself, which has been warning El Salvador for months that it will have to leave behind its intention to modernize its economy through Bitcoin, your president is unwilling to admit defeat.

Nayib Armando Bukele came to power promising a revolution and modernization of the country, and for this he put Bitcoin at the center of everything. So you bought more than 23,000 units of crypto since September. In fact, just a week ago she bought another 500 and spent more than 14 million euros on it. All public money, of course.

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And Bitcoin falling. And the Salvadoran debt at historic lows. But the one called the ‘CEO’ of El Salvador he refuses to see reality, and all while negotiating with the IMF a new loan worth 1,300 million. Knowing that the body requires him to put aside his idea of ​​​​Bitcoin for it.

And without proposing any alternative measure to tackle the situation, which has been aggravated by the inflationary loop that the entire world is experiencing. El Salvador has entrusted all its economic problems to Bitcoin, it has played a card, and now it is in danger of losing.

Everything has, therefore, very bad looking and it puts reality on the table: Bitcoin, nor any cryptocurrency, is still ripe for real life. In a context, furthermore, of practically a recession throughout the world, investors are fleeing this market which right now is not very safe.

And that, moreover, had swelled in recent years. Things as they are. Therefore, Bukele’s plan has limited hours if he wants his country to continue meeting its financial obligations.

And the rest of the world should be taking note if any country also had in mind to adopt Bitcoin. It is not the time, and it may never be. Because real life is not high school.

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