Bitcoin and cryptocurrency prices are back in shape in recent months after the summer market slump — and despite some serious warnings.
Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover the latest releases of NFT and new Crypto Blockbusters ready for 1,000% gains“
Bitcoin price reached an all-time high of nearly $69,000 per bitcoin in November before pulling back. Meanwhile, other major cryptocurrencies have made much larger gains than bitcoin over the past year — including Ethereum, Binance’s BNB, Solana, Cardano, and Ripple’s XRP — pushing the cryptocurrency’s combined market cap to $3 trillion highs.
Now, Samson Mao, chief strategist at Blockstream, a blockchain technology provider, has said he expects the volcano-backed El Salvador Bitcoin bond to help push the price of bitcoin to $1 million per bitcoin in just five years.
Register now, for free Codex—Daily cryptocurrency newsletter. We help you understand the world of bitcoin and cryptocurrency every day of the week
“If at the five-year mark bitcoin hits a million dollars, and I think it will, [El Salvador] You’ll sell bitcoin in two quarters and get $500 million back,” Mao said, speaking alongside El Salvador President Nayab Bukele over the weekend and explaining how the country could fund its own bitcoin bonds, Reuters.
“If you get 100 more countries to do these bonds, that’s half the market value of bitcoin there,” Mao said, adding that “game theory” on the bonds gave the first issuer El Salvador an edge, and once 10 of those bonds are issued, you get $5. One billion bitcoins will be withdrawn from the market for several years.
“This will make El Salvador the financial center of the world,” Mao added.
El Salvador’s so-called “volcanic bonds” – designed to finance the construction of a new low-tax, geothermal “Bitcoin City” from a nearby volcano – will be denominated in US dollars for 10 years and carry a 6.5% coupon.
“Invest here and earn all the money you want,” Bukele reportedly told attendees of an event concluding a week-long demonstration of bitcoin in El Salvador and likened his plan to the cities founded by Alexander the Great.
Codex—Free daily newsletter for crypto enthusiasts
However, the world of conventional finance appears to have taken a bleak view of El Salvador’s volcanic-powered bitcoin bond, with popular investors telling financial times This scheme could mean that the country has less access to traditional debt markets.
Kevin Daly, fund manager at Aberdeen Standard Investments, told FT.
Elsewhere, the International Monetary Fund (IMF), which is said to be in talks over a $1.3 billion loan agreement with the country, has warned El Salvador against its adoption of bitcoin as legal tender will increase financial and consumer risks.
“Due to the high price volatility of bitcoin, its use as a legal tender carries significant risks to consumer protection, financial safety, and financial stability,” IMF staff wrote in a statement related to a mission in the Central American country.