El Salvador’s Treasury Minister Alejandro Zelaya explained that the ongoing conflict between Ukraine and Russia is affecting the price of bitcoin (BTC) in international markets, also disrupting the highly anticipated Volcanic Bonds.
Volcano bonds await more stable market
The government of El Salvador announced in January this year the launch of bitcoin sovereign bonds, known as Volcano Bonds. However, these took a long delay and it is in this context that the El Salvador Treasury Minister confirmed that they could not launch these bonds as long as the price of bitcoin remains volatile.
In an interview with a local TV channel, Zelaya explained that he believes that investors may divert some of their funds to other industries during the conflict between Russia and Ukraine. He said :
“With the advent of the conflict between Russia and Ukraine, many crypto investments have become investments in companies related to the arms industry. Investments were transferred to the pharmaceutical industry and in other cases went to companies that make agricultural supplies.»
“Some crypto investors said: the profits of these companies will skyrocket this year, so I should buy more of these stocks and transfer crypto investment to other types of investments.“, he said.
El Salvador is still heavily invested in bitcoin
Mr Zelaya called for experts who are critical of the bitcoin purchases made by the El Salvador government through its president, Nayib Bukele. El Salvador currently has over 2,500 BTC in its wallets, purchased at various prices, and Bukele announces that he has frequently purchased “the float”.
Mr Zelaya pointed out that these bitcoins were not bought for sale and that there was no loss in the purchase without exchanging them for other assets. He said :
“They always come and say “lost”, when we didn’t really sell any bitcoins. If you do not sell, you keep them, you stay [que] the price goes up.»
It’s important to remember that you can’t always compare bitcoin to its dollar equivalent, some people buy bitcoin to invest, but others have a much more dominant project for the currency and are looking for an alternative to the current monetary system. These critics that Mr Zelaya denies are those who will be angry when the price of bitcoin rises, saying a bubble.
We are well aware of these arguments that arise cyclically. El Salvador was the first to pledge this overhaul of our monetary system, seeking decentralized and anti – inflation solutions. These battles are not won over the first few years, but over time.
El Salvador reserves the right to defer its Volcano Bonds, as failure of these due to external conflict would be a blow to the government as well as any bitcoin maximist. El Salvador is playing a risky game and against almost every current financial institution, it can be very rewarding to be overly cautious in such a complex situation.
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Alexis Patin
Passionate about geopolitics, economy, cryptocurrency, Eurasia and travel! (as far east as possible), crypto-trader for 4 years.
