The story starts with El Salvador. The first-ever country to legalise Bitcoin alongside the US dollar bypassing the law on September 2021. This historic moment was made possible by the El Salvador president Nayib Bukele. The whole world got inspired after the law and was trying to make similar moves. The citizens of the country felt liberated and started using Bitcoin for their day-to-day transactions. It included buying groceries, paying bills…etc.
In November, Nayib Bukele made a stunning announcement to build Bitcoin City! A city ushering with modern technologies and digital education. More importantly, it will be backed by Bitcoin itself. There would be no Taxes whatsoever in this city. Like the image below illustrates, 0% on all taxes. To top it all, they have managed to find a sustainable, clean and renewable energy source that produces 0% CO2 Emissions. If you’re wondering where the energy is coming from? It’s from a friggin volcano. Apparently, El Salvador sits at the Pacific Ring of fire 🔥 It spans at least 20 active volcanoes within its borders.
So they got the juice, the people’s belief and led by the President of the nation himself. You might be thinking, Why wouldn’t you invest in Bitcoin Bond? I would say, hold your horses. Always Do Your Own Research! (DYOR) Do not jump in FOMO cause the Bitcoin market is still highly volatile. Here are the specifications for the Bitcoin Bond. In simple terms, a bond is a fixed-income instrument that represents a loan made by the borrower. In this case, the borrower is the government. Since it is fixed-income, the interests are quite low compared to other financial instruments like Stocks or crypto. Bitcoin Bonds are expected to provide an interest rate of 6.5%. Samsom Mow, CSO of BLOCKSTREAM says “There would be special bitcoin dividends that may be 90–140% APY on top of the 6.5% coupon rate”.
He elaborates how this is made possible. The answer is in the specifications of the Bond itself. The Bond is expected to raise a total sum of 1 Billion USD. Only half of it would be used for building the infrastructure of Bitcoin City. The rest half would be invested in Bitcoin itself. Since Bitcoin is appreciating 30–45% every year, they claim to satisfy their promises. The city, if built would be revolutionary, El Salvador could have a probable shot at becoming a massive player in world markets. This is due to the inevitable truth of web3 and crypto-assets being massively adopted all over the world.
Overall it seems to be a very attractive investment option, but the decision of whether to invest in this or not lies at your own discretion. Always DYOR 😉