PDVSA Bonds Crash, Bitcoin Spikes As Venezuela Default Looms

Tyler Durden's picture

Following President Maduro's statement overnight on restructuring Venezuelan debt, bonds of the nation's state-owned energy company, Petroleos de Venezuela SA (PDVSA), have collapsed, with CDS pricing in a 99% probability of default...

As we detailed last night, during a nationwide TV address, Venezuela's socialist president Nicolas Maduro said the country will seek to restructure its global debt after the state-owned oil company makes the PDVSA payment due at midnight. Maduro blamed a financial blockade that is preventing the nation from rolling over its debt, according to Bloomberg.

“I decree a refinancing and restructuring of all foreign debt and all Venezuelan payments,” Maduro said. “We’re going to a complete reformatting. To find an equilibrium, and to cover the necessities of the country, the investments of the country.”


“We have had to face a real global financial persecution,” Maduro said, adding that OPEC member Venezuela had paid $71.7 billion in debt since he came to power in 2013, despite losing $100 billion in revenues to falling oil income. Too bad he didn't blame the "speculators" for the collapse of his socialist paradise.


If Venezuela wants to refinance one of its bonds, it is prohibited by the global financial dictatorship,” Maduro added according to Reuters, warning that “they will never suffocate us. We will never surrender to the U.S. empire,” he added, also criticizing Colombia for allegedly blocking a shipment of medicines under U.S. pressure.

And the fallout has begun this morning.

Ray Zucaro, chief investment officer at Miami-based RVX Asset Management, who holds Venezuelan debt, was quoted by Bloomberg as saying that President Nicolas Maduro’s announcement that Venezuela will seek to restructure its global debt means "tomorrow will be ugly for bondholders."

He was right! While Venezuelan sovereign debt is mixed, PDVSA's bonds are bloodbathing...

And PDVSA CDS surged over 800bps to new highs...

Implying a default probability (given standardized 25% recovery expectations - which admittedly may be high) of 99%!

Interestingly, Bitcoin spiked overnight to new record highs at $7500 - with volume surging as Maduro began to speak...

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HRClinton's picture

Queue BTC haters in 3, 2, 1....

Txpl9421's picture

But, EMP...You cannot eat BTC.....Its not backed by ANYTHING!   Tulips.

Did I miss anything?

And in the last two days a moderate investment in Bitcoin gained 1/2 of my annual salary.  Which either means I own a bunch of bitcoins.  Or I get paid crap.

TeamDepends's picture

Ever notice how OPM sounds like "opium".

crazytechnician's picture

Yeah you forgot to call it a Ponzi . The Flat Earth retards on here love that one.

abyssinian's picture

Tulip, fraud, ponzi, back by nothing, govt control, bubble, EMP, criminal currency, ransome ware blackmail money.... anything else?!  all you butthurt losers feel free to add to this list. Keep up the good work, the entertainment value from clueless btc bashers is priceless, no amounts of bitcoins could buy! 

Creepy_Azz_Crackaah's picture

Yep, this "currency" is only going up, Up, UP and can't possibly go down becasue of math. Very valuable, rare, math. It's new technology that the stooopid people can't understand. A new paradigm where the value of all math based "currencies" can only go up exponentially forever, never coming down. Ha! Those stooopid old-bug butthurt peanutz!

buy, Buy, BUY!!!!!!

That pretty much covers all of the pro bitcoin arguments. Now buy bitcoin or you're stoooopid. If you disagree, well then you're stoooopid.

tmosley's picture

When you misrepresent the arguments of your opponents, it is not your opponents who are stupid.

Creepy_Azz_Crackaah's picture

No, no... it's stooooopid.

Calling one's opponents names is "smart." Butthurt, old-bug, peanutz, haters, losers, clueless, bashers. Those are the "arguments" of "smart" people.

tmosley's picture

No, those are the insults that accompany the arguments.

Without the arguments, the insults would have no weight.


Blue Dog's picture

Check the charts. It often goes down. Then it recovers and hits new highs. Recently it went from $4700 to $3500 over a two week period. Then it broke $5000 a few weeks later.

The great thing about Bitcoin is it's not a market rigged by futures contracts with 100 paper contracts for every Bitcoin like there is with gold and silver.

There's a Bitcoin fork coming up later this month. Owners of Bitcoin will get an equal amount of Bitcoin Segwit2x. Much of the currents gains could be due to people buying Bitcoin because they want free Bitcoin Segwit2x. It could drop below $5000 for awhile after that. Who knows?

Another great thing about Bitcoin is that as it goes up it attracts more investors who've been watching it and are finally buying in. It could easily reach $10,000 by the end of the year.


quadraspleen's picture

to RT:

1. If you keep your BTC on an exchange you are wide open to having it nicked. Keep it on a hardware wallet and you're fine. #fakenews

2. Bitcoin is not money. I don't know why people keep trying to bash it for that. It's a straw man argument. It doesn't fail as a means of exchange, though; it is too volatile to be used as one by the retailers. I use it to buy stuff that becomes "free" about an hour after I bought it

NugginFuts's picture

I use it to buy stuff that becomes "free" about an hour after I bought it

Otherwise known as "bragging rights". 

Seriously, how can you not love making money with BTC?

spqrusa's picture

oldbug, fiat and stawk cucks like to be cucked.

shovelhead's picture

If you didn't sell any you didn't gain crap.

De Wilde Weldoener's picture

You don't seem to understand that if you hold Bitcoin you gain purchasing power.
It's not about how much fiat paper you can get back for it, it's about how much stuff you could buy with that eventual fiat paper.

MrTerry's picture

ALERT  Notice to all who wish to earn more bitcoin etc,   here is a free link to do so.    sign in and earn your bitcoin 


topspinslicer's picture

Bitcoin will become today's subprime worldwide disaster

tmosley's picture

No, it will become tomorrow's money.

Fiat is shit because of the built in theft mechanism, but its digitization makes it super convenient. Online sales and such. 

Crypto can slip in and take up that role easily, no need for collapse and widespread death. Indeed, the world will prosper under such a system, as it did under the gold standard. No arbitrary reallocation of purchasing power!

marysimmons's picture

Total cryptocurrency market cap over $200Bil today - that's up about $60 Bil in the last month!  $250Bil by end of year?  $1Tril by end of 2018?  $3Tril by end of 2019?  Or am I being too conservative?


tmosley's picture

We appear to be entering the exponentially increasing phase of the S-curve. Your numbers are exponential, but who knows if they are the right exponent?

marysimmons's picture

Segwit2X futures going crazy - up about 70% in the last 24 hrs to around $1,900!  People are doubling down buying BTC to get what most see as the B2X dividend.  But after the fork, coud be big correction.  What will happen to the altcoin market when $80Bil or so tries to buy super discounted altcoins and there are no sellers? Alts to the moon after the fork, IMO


dasein211's picture

Which Alts is the question..... which ones....

marysimmons's picture


tmosley's picture

Probably the ones that have gone down the most.

Thinking about picking up some more IOTA here. Down what? 75% from its high?

marysimmons's picture

IOTA's "tangle" could make blockchain obsolete.  Good speculative hold, IMO

btClunker's picture

Do you have wallets for each of your altcoins, hardware or desktop. Or do you keep them on orders on the exchange?

Nature_Boy_Wooooo's picture

S2X has steadily held around 15% of BTC.......I hope people realize that if the BTC price is overinflated by 30% that an airdrop of coins worth 15% is not a freebie.


I really hope there is more substance to this pump other than free coins. If not BTC is going to crash mega hard and a lot of people are going to lose on this. This could ultimately set BTC growth back years, I honestly hope this fork gets called off.

NugginFuts's picture

what if people just sell the new coin to buy more BTC? Not like we've seen the end of forks yet. 

Nature_Boy_Wooooo's picture

My guess is that, assuming the market is efficient, the futures market is the most likely indicator of what we can expect post fork. Of course if the market is currently overinflated due to the expectation of free money I would expect both versions of BTC to regress as that money retreats from the market.

De Wilde Weldoener's picture

If you want to sell the forked coin to buy more BTC you should be using Shapeshift to sell one for the other directly (and anonymously by the way).
No fiat paper need be involved, no new fiat paper necessarily enters or leaves the market.

abyssinian's picture

less than $1million volume.. I think I will use my BTC before the fork to buy NEO, ADA, KCS and some ETH... It will be shitshow before and after the fork.. I rather get ahead of the altcoin pop, I will be able to make up for not having free X2 coins


painlord-2k's picture

The market is discovering value (Bitcoin Cash) and discovering waste (practically all bond market and a large part of stock market).

painlord-2k's picture

The market is discovering value (Bitcoin Cash) and discovering waste (practically all bond market and a large part of stock market).

UnschooledAustrianEconomist's picture

Bitcoin or Fiatskis. Hmmm.

I go with PMs. At least they look pretty.

mofinance's picture

” Maduro added according to Reuters, warning that “they will never suffocate us. We will never surrender to the U.S. empire,”    


What a piece of shit. It's easy for him to say when your worth billions and your eating well. What about his Venezuelan people who are starving to death who are really suffocating ?

Spaced Out's picture

Yes, very odd that so many socialists end up being mega-wealthy. Apparently Chavez's daughter is worth around $4bn. Maybe she could make a contribution to a food bank??

UnschooledAustrianEconomist's picture

Getting rid of the corrupt and incompetent socialists won't help the Venezuelians.

Then it's the stooges of the Petrofiat-Empire kicking their asses. No improvement there.

mofinance's picture

Then what is the solution ? Who else other then the leader can really (and would really) change the system for the better?

UnschooledAustrianEconomist's picture

Not every problem has a solution.

passerby's picture

Bitcoin may soon surpass silver as the most monkey hammered asset.

tmosley's picture

Incorrect. You can't monkeyhammer an asset unless you control the exchanges responsible for all the volume.

Any price abborations introduced by the CME contract will be ignored by the market, which has more than enough liquidity in its free markets to set a price, and principles who are aware, and many who are downright hostile to shit like this, and they are perfectly comfortable with leaving somewhat corrupted but far more real data that that out of their pricing calculations.

You will note, for example, that the Zimbabwe BTC price is not included. Thrown out not because of corruption or any such thing, but just because it is an outlier! 

London..unfortunately's picture

Am I right in thinking that they are bringing in the futures trading to try and monkeyhammer it down - or could it even fuel the price?

marysimmons's picture

BTC traded on over 160 exchnages globally.  Only four of the top ten, Bittrex, GDAX, Poloniex,and Kraken are based in the US.  The largest, Bithumb, as well as Coinone, and Korbit, are Korean.  Bitfinex located in Hong Kong. HitBTC is European. BitFlyer is Japanese.

Look at the daly trading volumes and get blown away:


mily's picture

Maduro: "I was just kidding, here's your fochin' money" going long Venezuelan bonds at the same time

topspinslicer's picture

Even the so called joo bucks from the Feds isn't as volatile as crypt bitty coin. Just another game in the casino

tmosley's picture

That is a matter of adoption.

Fiat will become increasingly volatile as its adoption drops down and down. It will be as volatile as crypto is today when it hits 10% or so. But it will be volatile in the opposite direction.