El Salvador’s Grand Gamble: The Birth of Bitcoin City
Nayib Bukele recently dropped a bombshell at the week‑long Bitcoin promotion finale in Mizata that he’s rolling out the world’s first “Bitcoin City“—think futuristic metropolis powered by volcano fire and financed by Bitcoin‑backed bonds. Picture a place where the only taxes are VAT and your money keeps piling in.
Why a Volcano? Because Why Not?
- Geothermal energy from an active volcanic eruption—no coal, no smog, just pure hot‑cocoa‑energy.
- Fully eco‑friendly: The city’s lights, power, and even the streets will run on the planet’s natural heat engine.
- “Invest here and make all the money you want,” Bukele said, wearing a sarcastic white suit and a reverse baseball cap, waving over the beach resort backdrop.
Financing 300,000 Bitcoins (and a bit of humor)
- Half of the VAT will fund the bonds issued to build the city.
- The other half will pay for everyday services—garbage collection, street lighting, and hopefully a decent coffee shop.
- Estimated infrastructure cost: 300,000 BTC—a figure that will have investors and skeptics alike trying to keep their sanity.
“Alexandrias” of the Future?
Calmly, Bukele compared the design to a “circular city with an airport, residential and commercial zones, and a central plaza sculpted to look like a Bitcoin symbol from the sky.” He mused, “If we want Bitcoin to spread worldwide, we should build some Alexandrias.” Finally, a joke, at least for the techie crowd.
How The Bonds Are Apted Up
- First 10‑year “volcano bond” worth $1 billion (≈S$1.3 billion).
- Backed by Bitcoin, offering a juicy 6.5% coupon.
- Half the money goes straight into buying Bitcoin on the open market.
- After a five‑year lock‑up, the government will start selling part of the BTC it used to fund the bonds, giving investors a “bonus coupon.” Believe it or not—crypto wizards expect value to keep climbing.
What the Crowd Is Saying
While Bukele enjoys a fair amount of popularity, a sizable portion of Salvadorans think his Bitcoin obsession is a gamble. This has sparked protests and a healthy dose of skepticism about the crypto‑driven future. However, the Tech‑savvy president remembers his “dictator” tweet from September—though that might have just been a joke, because he still says the nation will become the world’s financial hub.
Final Thought
If you’re a Bitcoin enthusiast or just in it for the novelty, “Bitcoin City” is going to be a lot hotter—literally and figuratively—than any other city. Whether it will succeed is a story still in the making. One thing’s for sure: El Salvador is betting big on a blockchain dream that’s as warm as the volcano beneath it.
<img alt="" data-caption="El Salvador’s president Nayib Bukele speaks at the closing party of the “Bitcoin Week” where he announced the plan to build the first “Bitcoin City” in the world, in Teotepeque, El Salvador, on Nov 20, 2021.
PHOTO: Reuters” data-entity-type=”file” data-entity-uuid=”bef2fe33-fa3d-4c2c-947d-6ab82eab6127″ src=”/sites/default/files/inline-images/bitcoincity_0.JPG”/>
El Salvador’s Bold Move to Pull Bitcoin Out of the Market
What’s the plan?
Think of the Liquid Network as a high‑speed Bitcoin “side‑car” – a network where the bond will be issued. The government is drafting a fresh securities law to keep everything shipshape. Bitfinex is set to snag the first license as the exchange to run the operation, says Mow.
Why Bitfinex?
During a behind‑the‑scenes presentation, another speaker highlighted that Bitfinex had already been named the book runner for the bond. If you’re wondering what that means, it’s essentially saying that Bitfinex is ready to be the main on‑hand organizer for selling the digital paper.
How much Bitcoin are we talking?
- Once ten bonds are sold, a cool $5 billion worth of Bitcoin will be removed from the mainstream market for several years.
- If ten more countries join the club, that would soak up half of Bitcoin’s entire market cap.
The “Game Theory” Angle
Mow argues that this first‑mover advantage gives El Salvador a sweet spot. “If Bitcoin hits $1 million at the five‑year mark – and hey, I think it will – El Salvador can sell off a portion of that Bitcoin over two quarters and gobble up a $500 million profit,” he explained.
Bottom line
El Salvador is positioning itself to become a major player in the Bitcoin ecosystem, hoping to pull a large chunk of digital currency off the market and turn it into a real‑world treasure chest. Time will tell whether this bold gamble pays off.
