Bukele’s Bitcoin trade raises El Salvador’s sovereign credit risk: Moody’s

El Salvador’s historic embrace of Bitcoin (BTC) could have negative consequences on the country’s sovereign credit outlook, according to Moody’s Investors Service. 

Moody’s analyst Jaime Reusche told Bloomberg this week that El Salvador’s Bitcoin gambit “certainly adds to the risk portfolio” of a country that has struggled with liquidity issues in the past.

Under the leadership of President Nayib Bukele, El Salvador has recognized Bitcoin as legal tender and issued a state-run crypto wallet to facilitate payments, transfers and ownership. Along the way, El Salvador has amassed a treasure chest of 1,391 BTC, with President Bukele famously “buying the dip” on several occasions by using Bitcoin’s volatility to add to his country’s holdings.

Buying the dip

150 new coins added.#BitcoinDay #BTC

— Nayib Bukele (@nayibbukele) September 7, 2021

However, Reusche warned that accumulating more BTC would elevate El Salvador’s risk of default. “If it gets much higher, then that represents an even greater

Keep reading this article on Cointelegraph.com.

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