4 ms·

El Salvador’s President Went All in on Bitcoin. Then It Tanked

deevolution 4y ago
How is this any more newsworthy than netflix investors getting wiped out?
- swagonomixxx 4y ago
  Because any negative news on crypto is automatically HN-worthy.
- jakelazaroff 4y ago
  Because El Salvador is a country that is in danger of defaulting on its debt. Netflix is just a company.
  - cyphertruck 4y ago
    How is being down a little bit on a small Bitcoin investment making it any more in danger of default? The problem with fake news is it sounds real.
    - deleted 4y ago
      [deleted]
    - qgin 4y ago
      https://markets.businessinsider.com/news/bonds/el-salvador-bitcoin-bonds-investors-crypto-bukele-default-debt-ukraine-2022-5?amp https://markets.businessinsider.com/news/bonds/el-salvador-b... The government is issuing Bitcoin-backed bonds. Subsequently the market has sold off El Salvador’s 10Y traditional bonds to a level that increases the yield to 24%, representing the very high amount of risk of default the market is assigning to El Salvador. Is that all because of the Bitcoin investment or a more general distrust that the government is making sustainable moves? Hard to say.
Urgo 4y ago
Very misleading. If you're solely looking at the price, it was on June 8th 2021 that El Salvador Legislative Assembly voted to make Bitcoin legal tender [1]. The price of Bitcoin on June 8th had a intraday low of $31,114.44 USD [2]. The price of Bitcoin as I write this comment is $30,144.71 USD[2]. Yes, its down slightly since they signed it into law, but hardly tanked. Sure the price of Bitcoin went a lot higher AFTER they decided to use it as legal currency, but the headline is very misleading. [1] https://www.asamblea.gob.sv/node/11282 https://www.asamblea.gob.sv/node/11282 [2] https://coinmarketcap.com/currencies/bitcoin/historical-data/ https://coinmarketcap.com/currencies/bitcoin/historical-data... (pick June 7-8 2021)
- unmole 4y ago
  They brought multiple tranches when the price was much higher. I belive they are down by atleast 20% despite buying the dip multiple times. And more to the point, Bukele's shenanigans have signalled to the world that El Salvador's government can't be trusted to follow responsible financial policies. Which is why yeilds on this bonds have spiked and the country is finding it impossible to borrow.
  - cyphertruck 4y ago
    Only in clown world is stacking hard currency “shenanigans” and borrowing unlimited billions from IMF (always with strings to keep them poor) is “responsible”.
    - nradov 4y ago
      Cryptocurrency is not hard currency. Outside of failed states like El Salvador, it isn't backed by any military force or taxing authority. It's just like Monopoly money or something.
    - unmole 4y ago
      The very fact that a country needs an IMF bailout means that its economic policies were not working. Governments borrow to fund revenue deficits. What exactly does hodling a highly volatile asset that generates no cash flow acomplish?
ThrowITout4321 4y ago
I don't understand. The overall purchase was less than 100 mil. Yes, a large amount but for a country that should be very manageable and in theory it still has a possibility of gaining. I agree it's too early to make it a country's currency since it's too easy to manipulate and he has no control over it but it's a work in progress. He has years to make it work for the country.

How is this any more newsworthy than netflix investors getting wiped out?

swagonomixxx 4y ago
Because any negative news on crypto is automatically HN-worthy.
jakelazaroff 4y ago
Because El Salvador is a country that is in danger of defaulting on its debt. Netflix is just a company.
- cyphertruck 4y ago
  How is being down a little bit on a small Bitcoin investment making it any more in danger of default? The problem with fake news is it sounds real.
  - deleted 4y ago
    [deleted]
  - qgin 4y ago
    https://markets.businessinsider.com/news/bonds/el-salvador-bitcoin-bonds-investors-crypto-bukele-default-debt-ukraine-2022-5?amp https://markets.businessinsider.com/news/bonds/el-salvador-b... The government is issuing Bitcoin-backed bonds. Subsequently the market has sold off El Salvador’s 10Y traditional bonds to a level that increases the yield to 24%, representing the very high amount of risk of default the market is assigning to El Salvador. Is that all because of the Bitcoin investment or a more general distrust that the government is making sustainable moves? Hard to say.

Urgo 4y ago

Very misleading. If you're solely looking at the price, it was on June 8th 2021 that El Salvador Legislative Assembly voted to make Bitcoin legal tender [1]. The price of Bitcoin on June 8th had a intraday low of $31,114.44 USD [2]. The price of Bitcoin as I write this comment is $30,144.71 USD[2]. Yes, its down slightly since they signed it into law, but hardly tanked. Sure the price of Bitcoin went a lot higher AFTER they decided to use it as legal currency, but the headline is very misleading. [1] https://www.asamblea.gob.sv/node/11282 https://www.asamblea.gob.sv/node/11282 [2] https://coinmarketcap.com/currencies/bitcoin/historical-data/ https://coinmarketcap.com/currencies/bitcoin/historical-data... (pick June 7-8 2021)

unmole 4y ago
They brought multiple tranches when the price was much higher. I belive they are down by atleast 20% despite buying the dip multiple times. And more to the point, Bukele's shenanigans have signalled to the world that El Salvador's government can't be trusted to follow responsible financial policies. Which is why yeilds on this bonds have spiked and the country is finding it impossible to borrow.
- cyphertruck 4y ago
  Only in clown world is stacking hard currency “shenanigans” and borrowing unlimited billions from IMF (always with strings to keep them poor) is “responsible”.
  - nradov 4y ago
    Cryptocurrency is not hard currency. Outside of failed states like El Salvador, it isn't backed by any military force or taxing authority. It's just like Monopoly money or something.
  - unmole 4y ago
    The very fact that a country needs an IMF bailout means that its economic policies were not working. Governments borrow to fund revenue deficits. What exactly does hodling a highly volatile asset that generates no cash flow acomplish?

ThrowITout4321 4y ago

I don't understand. The overall purchase was less than 100 mil. Yes, a large amount but for a country that should be very manageable and in theory it still has a possibility of gaining. I agree it's too early to make it a country's currency since it's too easy to manipulate and he has no control over it but it's a work in progress. He has years to make it work for the country.