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4 Explanations Why El Salvador’s Bitcoin Bond Isn’t The Best Choice for Bitcoiners

Bitcoin

cryptoknowmics.com 01 April 2022 20:21, UTC
  
Reading time: ~3 m

The Volcano Bond is one of the most-awaited and hyped obsessions this year in the cryptocurrency market. Every other cryptocurrency user is eager to get benefits through this bitcoin-backed bond. Ever since El Salvador announced the launch of its own volcano bond, the cryptocurrency market has gone crazy. Infusing a billion-dollar self-governing bond into the cryptography recording system would be the first of its kind. After launching such a new-fangled and highly regarded element, is it prudent to disregard and overstep all traditional ways to conduct cryptocurrency business? Does the presence of Volcano Bond mean that existing financial institutions will no longer need to lend and support crypto exchanges? Well, that answer might not thrill the crypto enthusiasts. In order to understand this story, it is necessary to realize that El Salvador announced the concept of Volcano Bond a long time ago, and people have been waiting for its sale ever since then. However, the sale had to be postponed due to the war in Ukraine and Russia, which affected the cryptocurrency market. In recent weeks, the government has announced it is ready for sale following approval of local pension changes. Considering that this topic is so well arranged, why wouldn't it be prudent to invest in it? The following four major reasons may have some insight. Incompatible Issuer Apparently, recent reports state that the government has announced that Leo, a local energy company, will issue the Volcano Bond. El Salvador will no longer be the face of the bond. It might sound like a minor change, but it is not. Though the government has promised that LaGeo will get full support and all the expertise required from El Salvador, such promises cannot be guaranteed until legally mentioned in the contract. The debt-loaded past of LaGeo is another factor that adds Red Flag to the whole existence of Volcano Bond.  Inadequate Information and Lawful Safety Government has yet to share any legal documents regarding Volcano Bond. However, the documents associated with Bitcoin Bonds are lengthy and contain all the major details concerning finance and legal terms and conditions. Currently, the government has not even established a website that lists all the information related to bitcoin shares and security measures for people's money. This makes the Bitcoin deal a vulnerable one. Unprotected Funds El Salvador currently has an unfavorable financial situation with its bonds. Their value is declining in the market. In other words, El Salvador's financial condition is weak, and it is finding it quite difficult to manage its existing debts. It would be hard to get the country out of debt in such a situation. It would be irrational to invest in this government-backed bond in such a situation. Association with Bitfinex If all this were not enough, Volcano Bond would be available on Bitfinex. It is one of the most overlooked crypto exchange platforms barred in the United States. These Red Flags are hard to ignore, and any sensible investor would think twice before considering them. The bitcoin local ought to omit the volcano bond until a greater chance comes around.


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