Billionaire American venture capitalist Tim Draper said this week that a rise in Bitcoin to $100,000 could enable El Salvador to repay its International Monetary Fund (IMF) loan "and never have to negotiate with them again."
El Salvador is reportedly owed the IMF about $80 million, and El Salvador holds 5,913.76 BTC. Therefore, if Bitcoin rises to $100,000, El Salvador will receive $189 million in gains from its Bitcoin holdings, more than its IMF loan.
However, this calculation requires the following two assumptions:
1. Assume that the country's Bitcoin is uncollateralized, that is, it has not been used for other purposes or to pledge other loans or contractual obligations;
2. Assume that non-IMF debts are ignored, which amount to billions of dollars, that is, the country will be able to remit its revalued Bitcoin holdings profits directly to the IMF without having to repay more senior creditors first.
Since both of these assumptions are difficult to achieve, El Salvador may need far more than $100,000 in Bitcoin to repay the IMF debt, as well as all other lenders in El Salvador. (Protos)
Anais
