Salvadorans View Bitcoin Adoption as a Failure

El Salvador’s adoption of Bitcoin as official tender earned President Nayib Bukele worldwide acclaim from the cryptocurrency world. A little more than a year later, however, the majority of Salvadorans perceive the decision as a flop, as shown by the most recent survey. According to a study done by the University of Central America (UCA), 75.6% of those interviewed had never used crypto in 2022, and 77% deem cryptocurrency uptake “a failure,” as reported by AFP, highlighting the poll.

At the start of October 2021, El Salvador declared Bitcoin legal tender beside the greenback, permitting the utilization of cryptocurrencies in all transactions, from purchasing a cup of coffee to acquiring real estate and settlement of taxes. When reviewing poll findings, UCA rector Andreu Oliva declared that the acceptance of Bitcoin “is the government’s most disliked, most ridiculed, and most frowned-upon policy.”

Bitcoin is 72% lower than its all-time high of $69,000, which was reached 11 months ago. Analysts are arguing what trigger would allow the world’s biggest cryptocurrency break out of the narrow bands in which it has been trapped since the autumn.

Bitcoin was last seen trading at $19,156.25, a daily decrease of 1.2%. When Bukele declared Bitcoin legal money, the value of the cryptocurrency was around $45,000. Katie Stockton, founder and managing partner of Fairlead Strategies, stated: “Bitcoin is tightly coiled after staying above its long-term support zone ($18,300-$19,500) last week.” “We remain intermediate-term negative as price remains below the daily cloud’s dropping trend. With bitcoin below the 50-day moving average [around $19.7k], there is still an enhanced possibility of a breakdown, which would raise risk to secondary support under $13.9K. Despite being oversold, the long-term momentum is still substantially negative. There is currently no sign of a long-term bitcoin low.”

One of Bukele’s primary justifications for the adoption of Bitcoin was the public’s ability to save money on bank fees when receiving or transferring funds from abroad, particularly from/to the United States. It was reported that remittances accounted for more than a quarter of El Salvador’s GDP. Despite this, based on the results of the survey, the adoption does not seem to be a success. Additionally, the Salvadoran Central Bank said in September that Bitcoin represented “less than two percent” of total emigrant remittances.

Bukele used the summer’s big selloff to acquire more Bitcoin, obtaining an extra 80 Bitcoin using public funds in July. El Salvador’s entire Bitcoin reserves are at 2,381 units. The president lost about $61 million on his cryptocurrency investment.

77% of respondents questioned said they do not want their president to continue spending “public money to purchase Bitcoin.” In a study released last week, the International Monetary Fund (IMF) predicted that El Salvador’s GDP would grow by just 1.7% in 2023, which will be comparable to a recession.

In spite of the controversial Bitcoin decision and the bleak economic future, Bukele remains the most popular president in Latin America, according to a CID Gallup survey released last week.