El Salvador Crypto Adoption Is Lagging – May Lead To Disaster

El Salvador crypto adoption is lagging behind projected and desired timeframes, as hype for Bitcoin has fallen drastically amongst the population of the country.

When El Salvador legalized Bitcoin, the crypto world exploded. However, the current crypto winter has called the judgment into question.

Cryptocurrencies are still in their infancy, with enormous potential for growth. However, certain nations are leading the way in terms of mainstream crypto acceptance, while others are trailing. Despite the media attention, the government has struggled to gain widespread crypto adoption.

The Country Drives Crypto Adoption

El Salvador’s President Nayib Bukele said in September 2021 that Bitcoin will be legal money in the country. The South American country became the first to recognize bitcoin as legal money.

Bukele’s decision is largely recognized as a country’s first effort to adopt a volatile currency as legal money. The International Monetary Fund and other senior economists slammed the proposal.

Several financial experts questioned the conclusion of the judgment, given Bitcoin’s significant volatility. These opponents argue that because cryptocurrency has no tangible basis, the choice seems hasty and unprepared.

El Salvador’s BTC adoption strategy has been impacted by the cryptocurrency market’s volatility, notably Bitcoin. In November 2021, Bitcoin was selling at $69,000. It fell to $30,000 a little more than six months later, in June 2022. The global crypto market valuation has dropped from an all-time high of $ 3 trillion to $ 1.25 trillion in the previous six months.

BTC Reception in El Salvador

Bitcoin popularity in El Salvador has stalled, according to a new National Bureau of Economic Research (NBER) poll. According to the survey, after obtaining the $30 incentive, more than 60% of respondents abandoned the government’s Chivo wallet. By the end of the year, the Chivo wallet had reached 2.1 million Salvadorans, representing 75% of the population.

Furthermore, the survey discovered that 89% of Salvadorans had never received remittances using the app (just 3% utilized BTC). According to the poll, 99 percent of respondents had never paid taxes with Bitcoin.

Setbacks

El Salvador’s remarkable bitcoin adoption looks to have reached a hitch recently. Since peaking at around $69,000 in November 2021, Bitcoin has plummeted roughly 70%. El Salvador, which is already grappling with a major financial problem, has been impacted by the global slump in Bitcoin prices. Now, El Salvador crypto adoption is lagging behind.

The LATAM country’s investment of $105 million for 2,301 bitcoins has dropped in value by more than half to roughly $51 million.

While the President is very optimistic (some might say delusional), the reality is very different as El Salvador doesn’t seem to favor BTC adoption.

Is it wise to accept Bitcoin as a national currency when your population is one of the poorest in Latin America, when the adoption of crypto is lagging, and when your government is deep in debt and has been surviving a long time on loans? We’ll let you make up your own mind.

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