El Salvador expected to default as Bitcoin plummets

Re:El Salvador expected to default as Bitcoin plummets by riffraff on Wednesday May 11, 2022 @06:34AM (#31338031)

but these are junk bonds, it's not like there's pension funds that are going to buy them.

MSTR as a bitcoin proxy made sense at a time when you could not easily own bitcoins, but there are direct ways to do it now anyway (GBTC, BITO).

I am ignorant and I just don't know, but which regulation would forbid you from buying a bitcoin ETF but allow you to buy junk el salvador bonds?

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Re:El Salvador expected to default as Bitcoin plummets by adament on Wednesday May 11, 2022 @11:40AM (#31341570)

A pension fund might very well be allowed to buy junk bonds since it is a well-known if risky instrument whereas bitcoin ETFs are a newfangled weird instrument that is probably not covered by their guidelines.

I mean allowed in the sense that the investment guidelines set by the board allow it.

Source: I work at a pension fund where I think we are in precisely this situation.

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Re:El Salvador expected to default as Bitcoin plummets by xiphias2 on Wednesday May 11, 2022 @01:15PM (#31342965)

I think in the next few years the pressure for junk bonds like this in pension funds will just grow as inflation rate moves farther away from bond yields.

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Re:El Salvador expected to default as Bitcoin plummets by riffraff on Monday May 16, 2022 @03:14AM (#31394332)

thanks for your reply!

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Re:El Salvador expected to default as Bitcoin plummets by arcticbull on Wednesday May 11, 2022 @07:18AM (#31338302)

You are correct that at the time of announcement, if you had believed in Bitcoin and El Salvador (for some reason) it would have been advantageous to simply buy - separately - Salvadoran sovereign debt on the capital markets and Bitcoin on the spot markets.

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