El Salvador’s government is delaying the launch of the volcano bonds announced by President Nayib Bukele in November 2021. This was announced by Alejandro Zelaya, the finance minister, when he rejected the deadline for the issuance.

Thus, the issuance of the volcano bonds, also called “bitcoin bonds”, continues to be postponed since March, the month in which they were to be launched. The reason shared by the Minister of Finance is that there are currently no favorable conditions in the market for their launch and they are waiting for the cryptocurrency to rise in price. Previously the postponement had been due to the war between Russia and Ukraine.

Zelaya confirmed that the government of El Salvador will launch volcano bonds as soon as it starts a bullish rally. The cryptocurrency currently trades at US$38,500. According to analysts’ predictions, its value could reach US$100,000 in 2022, although there is no certainty that this will happen because others say it would fall to US$30,000 soon.

Analysts estimate that bitcoin’s value is being affected by the global financial context, in which investors are avoiding buying risky assets. This is due to the progress of the Russian war against Ukraine, China’s confinement measures and the generalized inflation that generates uncertainty about the economic future.

In view of the postponement of the launching of the volcano bonds, the Minister of Finance said that no one can say that “this is a fiasco”, since the delay has been due to market conditions. A situation that they cannot control and that, based on their strategy, will define how and when the issuance will be made.

El Salvador aims to achieve an oversupply of more than US$1 billion by launching the volcano bonds. Therefore, it is logical that they want them to come to market at a time when they can capitalize on it most strongly.

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