Bitcoin Rout Exposes Bukele’s Gamble and Hits El Salvador Debt

Bitcoin’s crash has hit few places as hard as El Salvador, exposing the risks of President Nayib Bukele’s high-stakes embrace of crypto and whipsawing the country’s debt markets.

Bukele, an ardent advocate who made the token legal tender alongside the dollar, has kept buying one Bitcoin a day even as the latest rout erased hundreds of millions of dollars from the government’s holdings and complicated talks with the International Monetary Fund over a $1.4 billion loan.

The focus is now catching up with him in financial markets, where investors have pushed credit default swaps to the highest level ...