El Salvador’s Bitcoin Experiment: Investment Giants Continue to Trust El Salvador

• In 2021, El Salvador became the first nation to bid farewell to traditional currency printing machines and accept Bitcoin (BTC) as its official legal tender.
• The transition to Bitcoin as legal tender in El Salvador has been a controversial topic since it began two years ago. This significant change has also brought a series of efforts to support the digital economy.
• JPMorgan, Eaton Vance and PGIM, Lord Abbett & Co LLC, Neuberger Berman Group LLC, and UBS Group AG have added El Salvador Bitcoin Bonds to their portfolios since April 2023.

El Salvador made a historic move in 2021 by accepting Bitcoin as its legal tender; the country’s decision has been widely criticized, but President Bukele is very serious about it.

El Salvador Made the Historic Move in 2021

In 2021, El Salvador became the first nation to bid farewell to traditional currency printing machines and accept Bitcoin (BTC) as its official legal tender. This historic decision was made under the leadership of President Nayib Bukele and has sparked both praise and concern from global voices.

While some applaud this move as innovative, others, including significant financial players like the IMF, have expressed concerns that the adoption of Bitcoin could shake the fragile Latin American economy, which has been struggling for decades.

The transition to Bitcoin as legal tender in El Salvador has been a controversial topic since it began two years ago. This significant change has also brought a series of efforts to support the digital economy. One notable step was the introduction of Bitcoin Bonds, a new approach to financing government projects.

According to data provided by Bloomberg, JPMorgan, Eaton Vance and PGIM, Lord Abbett & Co LLC, Neuberger Berman Group LLC, and UBS Group AG have added El Salvador Bitcoin Bonds to their portfolios since April 2023.

Zulfi Ali, a portfolio manager at PGIM, said:

“The story continues to be positive on the financial accounts, and Bukele remains consistent in signaling seriousness in paying off the bondholders.”

This trend, driving the wave of mainstream adoption of digital assets, indicates a growing enthusiasm among institutional investors for El Salvador’s Bitcoin Bonds. Furthermore, the El Salvador government has added an IMF expert to its advisory team and is in the process of repaying its $800 million Bitcoin bond debt.

Optimism Still High

JPMorgan’s research strategists, Ben Ramsey, Nishant Poojary, and Gorka Lalaguna, expressed their views in July as follows:

“While we may have missed a significant part of a major rally, we still believe El Salvador’s trend is valuable. There is room for this credit to continue performing well.”

The journey from bidding farewell to currency printing machines to stepping into the world of Bitcoin Bonds in El Salvador continues to attract attention and spark debates about risks and rewards.