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Bitfinex CTO Paolo Ardoino Highlights El Salvador Success with 70% Returns and J.P. Morgan Interest

Published August 17, 2023 2:15 PM
Teuta Franjkovic
Published August 17, 2023 2:15 PM
Key Takeaways
  • El Salvador’s 70% annual yield on dollar bonds attracts Wall Street’s attention, including J.P. Morgan
  • President Nayib Bukele’s debt repayment commitment eases bondholder fears, luring more investment
  • Despite a nearly 30% loss, Bukele’s Bitcoin investments stand at an average of $41,240 per coin

When El Salvador adopted  Bitcoin as a legal payment, Nayib Bukele, the country’s president, alarmed many Wall Street investors. However, Paolo Ardoino, Bitfinex’ CTO claims it is a clear sign of the government’s support and policy. Ardoino might be right because two years later, the bond rally Bukele is in charge of is proving to be too profitable to pass up.

A spokesperson from Bitfinex told CCN the company was seeing 70% returns and that it had garnered interest from the likes of  J.P. Morgan.

Among others who have suggested purchasing, or purchased the debt, betting that it will keep rising, are also Eaton Vance and PGIM Fixed Income, according to Bitfinex.

President Nayib Bukele responded to the revised growth prognosis on Twitter (X) by writing, “I told you so,” in reference to earlier forecasts by other agencies that the nation would not experience growth this year.

Bukele declared  on November 17, 2022, that starting that day, they would be purchasing 1 BTC daily.

El Salvador Bitcoin bonds
Credit: NayibTracker

El Salvador now holds 2,924 Bitcoins with a market value of about $85.3 million. The investment is, however, down over 30%, with a BTC cost average of $41,240.

El Salvador’s Positive Economic Momentum

J.P. Morgan’s report emphasizes the strong momentum seen in industries like construction.

“Although we missed a significant share of the rally, we still think there’s value across El Salvador’s curve,” J.P. Morgan research strategists Ben Ramsey, Nishant Poojary, and Gorka Lalaguna wrote in a July report  adding that “there’s room for this credit to keep outperforming.”

Additionally, J.P. Morgan highlighted the “impressive” pattern of declining budget deficits despite rising public investment. This accomplishment is especially notable because it defies expectations and shows how successfully El Salvador’s budget management strategies work.

Bitfinex’ CTO: Bonds’ Performance Show Investor Support For the Government

Paolo Ardoino, Bitfinex’s CTO’s told CCN that the outperformance it has been seen in El Salvador bonds is a clear signal that investors are supportive of the financial policies of the El Salvador government and demonstrates the renewed interest in investing in the El Salvador story, where crime is being combated, and the country’s finances are well managed.

“As the first company to receive a Digital Asset Licence, we are seeing significant interest in digital asset issuance and renewable energy investments, which the country has in abundance and is being used for Bitcoin mining and to provide more energy for the country’s electrical grid,” Ardoino stated.

J.P. Morgan’s revised outlook is consistent with El Salvador’s recent string of encouraging economic statistics. Increased economic activity, restrained inflation, and prudent fiscal management all appear to point the nation toward sustained growth.

The updated growth prediction is a vote of confidence in El Salvador’s economic policies and their potential to produce positive results as the country continues to navigate its economic environment. With the crypto companies coming over, El Salvador appears to be moving toward a more wealthy future as the economy is being driven forward by industries like construction, and fiscal responsibility is still a top concern.

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