The prices of Bitcoin and cryptocurrencies have re-formed in recent months after a hiatus in the summer market.and despite some serious warnings.
The bitcoin price hit an all-time high of nearly $ 69,000 per bitcoin in November before pulling back. Meanwhile, other major cryptocurrencies have made much bigger gains than bitcoin over the last year, including ethereum, Binance's BNB, solana, cardano, and Ripple's XRP.pushing the combined crypto market capitalization to highs of $ 3 trillion.
Now, Samson Mow, chief strategy officer at blockchain technology provider Blockstream, has said that he hopes that El Salvador's volcano-powered bitcoin-backed bonds will help the bitcoin price rise to $ 1 million per bitcoin. in just five years.
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"If bitcoin at the five-year mark hits $ 1 million, which I think it will, [El Salvador] will sell bitcoin in two quarters and get that $ 500 million back, "Mow said, speaking alongside El Salvador's President Nayib Bukele over the weekend and explaining how the country could fund its bitcoin bonds. Reuters.
"If you can get 100 more countries to make these bonds, that's half the market capitalization of bitcoin," Mow said, adding that the "game theory" on bonds gave the first issuer El Salvador an edge and a Once 10 of those bonds were issued, $ 5 billion in bitcoin would be withdrawn from the market for several years.
"This is going to make El Salvador the financial center of the world," Mow added.
El Salvador's so-called "volcanic bonds", designed to finance the construction of a new low-tax "bitcoin city," powered by geothermal energy from a nearby volcano, will be 10-year bonds denominated in US dollars and will have a coupon of 6 ,5%.
"Invest here and earn all the money you want," Bukele reportedly told attendees about an event that closed a week-long bitcoin promotion in El Salvador and compared his plan to cities founded by Alexander the Great.
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However, the world of traditional finance appears to have had a low opinion of El Salvador's volcano-fueled bitcoin bonds, with big-name investors saying that Financial times the scheme could mean that the country has less access to traditional debt markets.
"I don't know who is going to buy these bonds, but it sure isn't going to be us," said Kevin Daly, a fund manager at Aberdeen Standard Investments. FOOT.
Elsewhere, the International Monetary Fund (IMF), which reportedly engaged in talks about a $ 1.3 billion loan deal with the country, he warned El Salvador that its adoption of bitcoin as legal tender will increase financial and consumer risks.
"Given the high volatility of bitcoin prices, its use as legal tender carries significant risks to consumer protection, financial integrity, and financial stability," IMF staff wrote in a declaration related to a mission in the Central American country.
