El Salvador has plans for Bitcoin City. However, its bonds are priced for default.

How Beautifully?

El Salvador has models. President Nayib Bukele tried to sell bonds backed by Bitcoin but there were no takers.

Buy the Dip

Soon the US will follow. Yeah right.

President's Nayib Bukele Bitcoin City Vision 

Fears of Default

Meanwhile, back in the real world, El Salvador reveals plans for Bitcoin City amid fears of default

Last year, Bukele announced that El Salvador would become the first country in the world to accept bitcoin as legal tender, alongside the US dollar. El Salvador was going to fund the project with $1 billion in bonds. These public debt securities would be secured with bitcoin instead of a fiat currency. These so-called volcano bonds were meant to be issued in March, but the date has been pushed back to September.

“We will have no income tax, forever. No income tax, zero property tax, no procurement tax, zero city tax, and zero CO2 emissions,” he said in a statement in November. “The only taxes that they will have in Bitcoin City is VAT, half will be used to pay the municipality’s bonds and the rest for the public infrastructure and maintenance of the city.”

Bloomberg agency estimates that El Salvador has bought 2,301 bitcoins since it became legal tender in September 2021. These tokens currently have a total value of $74 million, well below the $103 million Bukele paid for them.

Government bonds are trading at 40% of their original value, as investors start to doubt whether the country can meet its next debt payment in January 2023.

Betting Your Country on Bitcoin

Nothing like betting your country on Bitcoin (BITCOMP).

And the bonds to build the city, cancelled.

Michael Saylor, CEO of MicroStrategy (MSTR) bet his company on Bitcoin. El Salvador president Nayib Bukele bet the country.

That's how crazy things have gotten.