Do you guys remember how Bitcoin was breaking down a couple weeks prior to the Elon musk Tesla Bitcoin buy announcement? Even though they bought over $1B worth the price still kept going down. It only rallied afterwards because it was announced.
So since we are in a down trend, even if they buy $500M on the open market the price will still most likely trade sideways or go down if there is enough sell pressure. These days 1/2 a $1B isn’t as impossible as it seemed a few years ago, Bitcoin is very liquid now.
Topic: Everything you wanted to know about ES Volcano Bond and were afraid to ask! - page 4. (Read 1573 times)
March 12, 2022, 11:43:07 PM
March 12, 2022, 09:13:01 PM
As expected, we have confirmations on bond launch:
Bullish.
Markets are in turmoil right now, so bit the bet moment for a bond launch. I guess they know something we don’t.
Bullish.
Markets are in turmoil right now, so bit the bet moment for a bond launch. I guess they know something we don’t.
Since many of us who participate in this forum are bullish about long-term bitcoin fundamentals - or at least many of the regulars here.. cannot presume everyone is bullish about long term bitcoin fundamentals... I doubt that anyone really knows anything more than a lot of us regulars here - except for sure they may be grappling with a lot of great advisors.. but that still would not necessarily mean that they are going to act on whatever information in front of them in ways that end up being correct.
Whether Bukeile has surrounded himself with bitcoin geniuses or not, even for a relative bitcoin newbie he has seemed to have locked into a decent number of the people who many of us trust within bitcoin maximalism circles (hate to label the bitcoin insiders in such a way because we have our own minds and even disagreements within bitcoin maximalism)..
I guess my main point is just to argue that no own really knows what is going to happen with bitcoin price dynamics, even though many of us bitcoin maxis do likely continue to believe that it does not necessarily hurt matters to be able to double down on investing when BTC prices are down - even though it is also likely that some folks who were going to be investors into such bond might be more timid during these kinds of times to be investing in such a thing.
No guarantees.. but seeming to be a 45%-ish discount compared to where BTC prices were in November.. and like Michael Saylor had said after the May 2021 correction down from $64,895 to $28,600-ish.. (maybe Saylor said it a bit hyperbolically?) "we were going to buy anyhow, so we were glad to get some bitcoin in the mid-$30ks when they had been upper $50ks a month or so earlier - either way we were buying, so it was nice to get them cheaper."
March 11, 2022, 01:31:18 PM
As expected, we have confirmations on bond launch:
Bullish.
Markets are in turmoil right now, so bit the bet moment for a bond launch. I guess they know something we don’t.
Bullish.
Markets are in turmoil right now, so bit the bet moment for a bond launch. I guess they know something we don’t.
March 08, 2022, 08:01:40 AM
Exploring the involvement of the guys from Tether in the Lugano project, I came across an interesting article that reveals a lot of interesting details about how the idea of Volcano Bonds came about and who are the people who have their fingers in it. Despite the many details found in the OP, it seems to me that this article is full of very interesting things that are supported by links to original sources.
El Salvador Bitcoin: Tether buys itself a country; and why Chivo sucks
El Salvador Bitcoin: Tether buys itself a country; and why Chivo sucks
March 06, 2022, 10:13:55 AM
However, I have no doubt that there will always be those who only care about profit and do not care about the political background. The guys from Wall Street have found an opportunity even where for many it seems that the risk is simply too great.
Distressed bond buying it is something that has ever existed. The bank buys low values bonds in the case the political situation evolves for the good.
Just remember that they are not buying those assets from the issuer, but probs lo from pensions funds, asset managers or other subjects that are not allowed to hold junk bonds.
In a sene, they are not benefiting Russian finance in any way.
The fact that they are going to profit from these situation is far from clear, given the unprecedented thoughtness of imposed sanctions.
March 05, 2022, 07:30:17 AM
Everything you say is undoubtedly true, but it seems to me that the damage will be even greater due to the political decision not to condemn the aggression that will undoubtedly gain weight when war crimes charges are filed, because there are clear elements of ethnic cleansing and crimes against humanity. I personally would not do business with anyone who supports such a policy, and I was surprised that Bukele is much closer to various dictatorial regimes than to some Western democracy, no matter how imperfect it may be.
However, I have no doubt that there will always be those who only care about profit and do not care about the political background. The guys from Wall Street have found an opportunity even where for many it seems that the risk is simply too great.
However, I have no doubt that there will always be those who only care about profit and do not care about the political background. The guys from Wall Street have found an opportunity even where for many it seems that the risk is simply too great.
As the U.S. and allies tighten sanctions on Russia and choke off investor demand for its assets, parts of Wall Street are jumping on the buying opportunity that it’s creating.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. have been purchasing beaten-down company bonds tied to Russia in recent days, as hedge funds that specialize in buying cheap credit look to load up on the assets, according to people with knowledge of the private transactions. Goldman Sachs is primarily asking for corporate debt from the likes of Evraz Plc, Gazprom PJSC and Russian Railways that matures within the next two years, and has made bids for Russian sovereign notes, the people said.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. have been purchasing beaten-down company bonds tied to Russia in recent days, as hedge funds that specialize in buying cheap credit look to load up on the assets, according to people with knowledge of the private transactions. Goldman Sachs is primarily asking for corporate debt from the likes of Evraz Plc, Gazprom PJSC and Russian Railways that matures within the next two years, and has made bids for Russian sovereign notes, the people said.
March 04, 2022, 12:28:52 PM
Given that El Salvador and some other countries have refrained from condemning Russia's aggression against Ukraine and have practically sided with those who tacitly support it - does that perhaps mean that this project may not have the support it expected?
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Putting political considerations about Bukele aside, I guess the bond will be affected by this events as acutely as every other financial instrument in the world: liquidity drain, increased volatility, increased inflation concerns, increased credit risk and scrutiny over crypto might affect negatively this bond sale, as much as every other happen isn’t at the same time.
March 04, 2022, 11:31:42 AM
This attitude reminds me of how a regular retail investor behaves when the price of BTC is in some kind of stagnation or bear market - then there is mostly some disappointment and pessimism and no one realizes that then is the right time to invest. But I'm not surprised that a news agency like this writes this way, because journalists have long since stopped being professionals, and more and more ordinary mercenaries who write articles the way someone tells them to.
Given that El Salvador and some other countries have refrained from condemning Russia's aggression against Ukraine and have practically sided with those who tacitly support it - does that perhaps mean that this project may not have the support it expected?
Given that El Salvador and some other countries have refrained from condemning Russia's aggression against Ukraine and have practically sided with those who tacitly support it - does that perhaps mean that this project may not have the support it expected?
Cuba, Nicaragua, El Salvador and Bolivia joined several dozen other countries in abstaining during a vote to condemn Russia’s invasion of Ukraine and to demand Moscow withdraw its troops “immediately, completely and unconditionally.” El Salvador’s abstention was telling, as well, mirroring the silence from the country’s leadership about the conflict since it began. The country’s president, Nayib Bukele, was extremely vocal in the days leading up to Russia’s invasion, mocking US assertions that an invasion was imminent. “The boy who cried wolf,” Bukele tweeted on Feb. 18, responding to US President Joe Biden, who said he believed Russia would invade in the next several days. Since Russia has invaded, however, Bukele has remained silent on the matter.
March 02, 2022, 12:40:05 PM
Is this Reuters? The main news agency in the World describing the Volcano Bond in such elementary terms?
El Salvador's bitcoin bond faces more doubts as volatility spikes
I would say this is a misrepresentation of reality.
And factually wrong when they state investment is less appealing with a lower BTC.
On the contrary, lower Bitcoin levels mean a more attractive investment with lower entry point in the BTc market.
But of course, I am biased.
El Salvador's bitcoin bond faces more doubts as volatility spikes
I would say this is a misrepresentation of reality.
And factually wrong when they state investment is less appealing with a lower BTC.
On the contrary, lower Bitcoin levels mean a more attractive investment with lower entry point in the BTc market.
But of course, I am biased.
February 22, 2022, 10:34:42 AM
A few days ago Market Insider reported an update on the “verbal commitment” of the vulcano bond.
I missed that, nobody reported it, so I am adding it to the thread, as it is still relevant.
El Salvador already has $500 million in verbal commitments for its billion-dollar 'meme' bitcoin bond — and $5 billion in more bonds could follow
Samson Mow of Blockstream, the tech firm coordinating the bond, told the Journal the country has already gotten $500 million in verbal commitments for its bond.
<…>
El Salvador is even thinking about raising as much as $5 billion more in bitcoin-backed bonds in the future, the Journal reported.
So it appears the informal order book has just been upgraded to 500 millions and this bodes well for future issuances.
I bet this optimism has to be judged trough the lens of the person expressing it, but I think we can be sure more issues will follow, as I stated before, and the “ optimism”lever it will be really important to determine the coupon issue, that I bet should quickly converge toward USD denominated Debt.
I missed that, nobody reported it, so I am adding it to the thread, as it is still relevant.
El Salvador already has $500 million in verbal commitments for its billion-dollar 'meme' bitcoin bond — and $5 billion in more bonds could follow
Quote
Samson Mow of Blockstream, the tech firm coordinating the bond, told the Journal the country has already gotten $500 million in verbal commitments for its bond.
<…>
El Salvador is even thinking about raising as much as $5 billion more in bitcoin-backed bonds in the future, the Journal reported.
So it appears the informal order book has just been upgraded to 500 millions and this bodes well for future issuances.
I bet this optimism has to be judged trough the lens of the person expressing it, but I think we can be sure more issues will follow, as I stated before, and the “ optimism”lever it will be really important to determine the coupon issue, that I bet should quickly converge toward USD denominated Debt.
February 10, 2022, 07:25:22 AM
With an expected move, Fitch Lowered El Salvador sovereign rating.
Fitch lowers El Salvador’s rating due to Bitcoin adoption
American credit rating agency Fitch Ratings has lowered El Salvador’s long-term Issuer Default Rating from B- to CCC, mentioning “policy unpredictability” and the “adoption of Bitcoin as legal tender” as some of the factors that led to the downgrade.
As I said, the news was expected, so in a “buy the rumours sell the news” fashion, the price of USD denominated El Salvadorean Bonds actually junped.
Fitch lowers El Salvador’s rating due to Bitcoin adoption
Quote
American credit rating agency Fitch Ratings has lowered El Salvador’s long-term Issuer Default Rating from B- to CCC, mentioning “policy unpredictability” and the “adoption of Bitcoin as legal tender” as some of the factors that led to the downgrade.
As I said, the news was expected, so in a “buy the rumours sell the news” fashion, the price of USD denominated El Salvadorean Bonds actually junped.
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If you squint your eyes, you can see the pop in bond prices!
February 09, 2022, 01:04:03 PM
Breaking news:
El Salvador Bitcoin Bond Issuance Coming as Soon as March 15: Finance Minister Quote El Salvador’s initial $1 billion bitcoin bond issue will take place between March 15 and March 20, Finance Minister Alejandro Zelaya said Tuesday. This is pretty much in line with the expected launch date previously disclosed. I wouldn’t lean too much on the 6.5% commitment. February 03, 2022, 01:41:18 PM
According to Bloomberg the Launch of the Volcano Bond is nearing and being ready in March:
Quote El Salvador to Sell Bitcoin Bond in March, Finance Minister Says By Michael McDonald (Bloomberg) -- El Salvador’s government expects to issue so-called volcano bonds on Blockstream’s Liquid Network in the first half of March, Finance Minister Alejandro Zelaya said during a local TV interview on Dialogo con Ernesto Lopez.
This is a little later than initially prospected by Samson Mow, but I think it’s a fair timeline, given all the technical, legal and “external pressures” connected to this bond issue. January 22, 2022, 08:06:42 AM
Apparently the EL Salvador Bitcoin Bond 1 will be launched in February:
 Al this source from this interview: ON THE GROUND IN EL SALVADOR WITH SAMSON MOW AND THE VOLCANO BITCOIN BOND Samson Mow Stated: Quote “We’re closer to $500M in verbal commitments now but stopped tracking so we could focus on the actual issuance and all the steps still needed to be done to go live. We’re committed to Q1 2022 and it’s likely we could see the Volcano Bond launch in February,” he added. As I already said, it's a sure hit from the "Bitcoin Community", but my doubt about institutional investors persist. January 17, 2022, 07:53:09 PM
In the past days Moody's has been quite vocal on El Salvador:
Bitcoin Trades Add to El Salvador’s Sovereign Risk, Moody’s Says Quote El Salvador’s Bitcoin trades are adding risk to a sovereign credit outlook that was already weak and reflecting a growing chance of default, according to Moody’s Investors Service. Tonight Moody's downgraded El Salvador Sovereign Bonds: (actually looking for a direct headline of this) Najyb Bukele wasn't impressed:  This is actually going to hurt the volcano bond, sending them even more on the "dear" side of the market. The market is currently closed, but I expect the USD bonds to fall significantly, thus making the combination Legacy USD bonds + Bitcoin purchase, even more compelling versus the simple bond holding. The middle finger to the IMF crooks nocoiners is going to be a little bit more costly, to our fellow bitcoiner. January 10, 2022, 07:45:57 PM
A couple of days ago, I tweeted my concerns to Excellion and Paolo Ardoino.
The answer I got was quite reassuring:  I waited a little bit before reporting the tweet as I saw a like by Paolo Ardoino snd I hoped for another reply, which sadly never came.... So basically, no delays due to the disruption in Kazakhstan. I think it is good news for everyone! January 10, 2022, 11:56:38 AM
The logic says this could even get worst if bitcoin mining load goes to EL Salvador and all the other countries revoke from the mining operations or lets say they completely ban the use of bitcoin. There would be only one country left to mine the coins and use them and thats El Salvador. The logic applied above is explaining bitcoin monopoly, which in actual sense is not practicable. All other countries cannot revoke from mining nor ban completely the use of bitcoin because of the nature of bitcoin. What majority of the country can do is to enforce extreme measures to regulate bitcoin, which will indirectly hinder bitcoin growth. However, my major concern is about the Bitcoin City. This project might indirectly be promoting centralization of bitcoin or bitcoin users, miners etc. The logic could be that whenever there is an attack on bitcoin, it will be easy to locate the city of bitcoin and unleash mayhem. The enemies of bitcoin will then intensify their efforts to hunt down the bitcoin city. Remember, bitcoin is safe on blockchain but bitcoin users and hardwares are not secured by blockchain. They are prone to damages. January 09, 2022, 05:44:15 AM
Cutting long story short: this bond is a financial disaster. There is a very good analysis of this concept from a Bloomberg article. Basically, buying an El Salvador Bond and using the residual amount to buy bitcoin currently produces a superior result. And this holds true in pretty much every possible future scenario. Even in a very unpredictable scenario of bitcoin going to zero, the payoff would be better for the traditional finance bond. In an environment where Bitcoin would go to zero, we are left wondering why we should buy a Volcano Bond in the first place. I run a few computations in the spreadsheet, and even if in the ultra bullish case illustrated by Samson Mow, the Volcano Bond is inferior to the strategy of buying a traditional bond and investing the change left after the bond purchase in Bitcoin. The logic says this could even get worst if bitcoin mining load goes to EL Salvador and all the other countries revoke from the mining operations or lets say they completely ban the use of bitcoin. There would be only one country left to mine the coins and use them and thats El Salvador. The thing is, they are using it as the legal tender which means whole thing is official and by few years they will have almost all of the population of their country using it. Imagine for a sec if other countries started to pull of from the crypto space for X reasons then the whole money that is invested into crypto will be sold off and El Salvador would be buying it as there would be no other buyer of the same. What will happen to their bonds by then? The value will decrease dramatically causing huge inflation in the country. Seems terrific idea to go to the sink. January 09, 2022, 05:12:50 AM
A few more information on the venue where the bond should be traded:
Bitfinex launches new exchange for trading tokenized equities and bonds Bitfinex opened a new exchange dedicated to tokenised assets, both equity and bonds, named Bitfinex securities: Quote Bitfinex Securities will allow small and medium-sized companies to list their tokenized equities, bonds, or funds and raise capital. In turn, Bitfinex Securities' customers will be able to invest in and trade tokenized securities. In the article it is well explained the unique feature of this platform is the possibility to issue new token, not only trade existing ones. This allows customers handle trough BS the whole life cycle of their digital tokens: issuance, trading, settlements, payments, redemptions. One very important point of this is the fact that BS will be based in Kazakistan, and regulated by the local financial authority: Quote Bitfinex Securities says it is based in Astana, Kazakhstan, and is regulated by the Astana International Financial Centre (AIFC) Authority. According to Paolo Ardoino’s statements, Bitfinex believe this is a positive choice: Quote When asked why Bitfinex Securities chose to be based and licensed in Astana, a relatively lesser-known jurisdiction, Ardoino said Astana is setting up as one of the financial capitals of Asia and has an "extremely thorough" regulatory process based on regimes in the U.K., Dubai and Abu Dhabi. "We had been working on obtaining this license for the last year and a half," said Ardoino. I have some doubt about this statement. I think they had to apply to Astana because it the “best of the available countries” where to register. The problem is many potential clients will have problems using that exchange: Quote As with its crypto trading platform, Bitfinex's securities platform will also be not available to residents of the U.S. and other prohibited jurisdictions. Citizens of Canada, Switzerland, Venezuela, Austria, and Italy are also on Bitfinex Securities' list of prohibited persons. A lot of customers simply won’t be able to directly access that exchange. They will have to operate trough subsidiaries, risking sanctions from the regulators, or trough introducing broker-dealers, or even using wrapped bonds. Then a couple of observations immediately raise to my mind:
January 05, 2022, 05:53:14 PM
I guess that this "bitcoin city" thing has been tried so many times but usually since we are a global bunch and not something that is we do in just one place, that doesn't work. I mean usually there isn't enough population in just one city to build something like that, even when you consider a nation like USA, if you build a city somewhere, then you are expecting everyone around the USA to relocate there and why would they? Coinbase is fine in California, why would they leave? Gemini is fine in New York, they won't budge. So all in all when we are talking about even a much smaller nation then it becomes even harder to build something like this only because of lack of population.
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