Moody's criticizes El Salvador for bitcoin legalization

by in Cryptocurrency News

El Salvador

The rating agency Moody's considers that the authorities of El Salvador made a big mistake by legalizing BTC. Analyst Jaime Reush expects the investment attractiveness of this Latin American state to decline.

Crypto is a volatile instrument. El Salvador recognized BTC and began to invest its reserves in this asset, thus worsening its position.

The President of the country Nayib Bukele announces on Twitter the acquisition of the next batch of cryptocurrency. Moreover, the authorities are activated during periods of falling BTC value.

El Salvador currently controls 1,391 bitcoins. The country has already suffered losses. It spent about $71 million on cryptocurrency, giving away an average of $51,056 for each coin.

Trending: El Salvador bought an additional 80 BTC amid a drawdown in the course

Now, this amount of bitcoins is estimated at $59 million.

Jaime Reusz stressed that El Salvador is already experiencing liquidity problems. Its financial capabilities are weakening, and investments in BTC only aggravate the economic situation of the country.

The yield on government bonds of El Salvador soared above 35% per annum, the country must repay obligations on them in January 2023. The record-high rate suggests that financial markets do not believe that the authorities of the Latin American state will ever be able to pay off investors.