Nayib Bukele, President of El Salvador, reacted on Twitter to Moody’s warning about the Central American country’s Bitcoin investments.
The president , 40 years old, tweeted: BREAKING: EL SALVADOR DGAF. These letters stand for “don’t give up a fuck”.
Bukele responded to a Tweet Sunday about Moody’s warning last week regarding the risk bitcoin trading poses for its sovereign credit rating.
Bloomberg was informed by the rating agency that El Salvador’s bitcoin holdings “certainly adds to the risk portfolio,” especially for a government that has struggled with liquidity pressures in past.”
According to a Bloomberg analysis El Salvador holds about 1,391 bitcoins. Moody’s also stated that if the figure is higher it could pose a greater risk to the issuer’s repayment capacity and fiscal profile.
Moody’s dropped the country’s credit rating from CAA1 in July 2013. This indicates a high risk of defaulting on its debts. Moody’s cited a “challenging redemption plan” and a “deterioration of the quality policymaking” as the reasons for downgrading the country’s credit rating to CAA1, which indicates a very high risk of default on its debts.
El Salvador’s aggressive buying spree in bitcoin, especially in times when the coin’s value has dropped, started in September 2021, when the Central American country adopted the cryptocurrency legal tender. This made it the first country to recognize bitcoin as a currency.
Bukele gained international fame for this landmark move, particularly among crypto enthusiasts. Ark Invest CEO Cathie wood, who supported his move to push El Salvador towards the bleeding edge crypto market, told Time Magazine Sunday how Bukele’s Bitcoin push gave citizens financial opportunities that they didn’t have previously.
However, global financial institutions like the International Monetary Fund or Wall Street banks like JPMorgan were less optimistic.
Bloomberg estimates that El Salvador has lost $10 million due to recent drops in Bitcoin. Bitcoin traded at $41,536 in New York on Tuesday afternoon, around 40% less than its record high last November of $69,000.