El Salvador’s Bitcoin Blunder: A Comedy of Errors!

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Well, folks, gather ’round! El Salvador, the first country to throw a Bitcoin party in 2021, just pulled the plug on the whole shindig! 🎉 Why, you ask? Because the IMF showed up and said, “Hey, not so fast, buddy!” So, what went wrong in this crypto circus? 🤡

Table of Contents

The curious case of El Salvador

In 2021, El Salvador decided to make Bitcoin (BTC) legal tender. That’s right, folks! They said, “You MUST accept Bitcoin!” Merchants were practically forced to take it, like a bad date you can’t escape! 💔 And to sweeten the deal, they launched the Chivo wallet, a government app that promised to make Bitcoin transactions as easy as pie—if pie were made of digital currency and confusion! 🥧

But hold your horses! The U.S. dollar was still the reigning champ, so if you didn’t want to play with Bitcoin, you could stick to good ol’ USD. And guess what? Only 15% of Salvadorans trusted Bitcoin! Talk about a trust fall gone wrong! 🤦‍♂️

Protesters in San Salvador set alight a Bitcoin ATM which had just been installed by the government.

The protest was called to oppose the El Salvador government’s decision to make Bitcoin legal tender.

— Radical Graffiti (@GraffitiRadical) September 19, 2021

While the crypto world was throwing confetti, the locals were lighting up ATMs like it was the Fourth of July! 🎆 And why? Because many merchants were not ready to accept Bitcoin, and the law didn’t even bother to address that little hiccup! Plus, most folks didn’t have bank accounts, and cash was still king! 💰

What are the results of the El Salvador Bitcoin experiment?

After nearly four years of this Bitcoin rollercoaster, the results are in: mostly negative! But hey, at least tourism got a little boost! 🎢 The announcement of Bitcoin adoption brought in a 20% increase in tourists in 2024. Who knew crypto could be a tourist attraction? “Come for the beaches, stay for the Bitcoin confusion!”

But let’s not sugarcoat it—Bitcoin didn’t save the day! It didn’t hedge against inflation, and the Chivo wallet had more technical issues than a sitcom pilot! 📺 And let’s not forget the hacking incidents that made people trust Bitcoin about as much as they trust a used car salesman! 🚗

By 2024, a whopping 92% of Salvadorans were still ignoring Bitcoin like it was a bad smell! And when it came to remittances? Only 1.3% were made using Bitcoin. Talk about a flop! 🎤

How did the El Salvador Bitcoin experiment end?

Fast forward to 2025, and the IMF said, “Time to clean up this mess!” So, El Salvador’s Congress decided to revise the law in exchange for a $1.4 billion loan. The catch? Bitcoin’s legal tender status was out the window! 🚪

Now, businesses can choose whether to accept Bitcoin, which is like saying, “You can choose to eat your vegetables or not!” But let’s be real, who wants to eat their veggies when there’s cake? 🍰

Good morning!

We are now in DAY FIVE since El Salvador rescinded Bitcoin as legal tender, at the request of the IMF

There continues to be a lot of misunderstanding about what happened on Wednesday, so it might be worth giving a brief overview

In 2021 El Salvador made history…

— John Dennehy (@jdennehy_writes) February 3, 2025

So, while the government is still buying Bitcoin like it’s going out of style, the future of crypto in El Salvador looks about as bright as a blackout! 💡 Stay tuned for more twists in this crypto comedy!

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2025-02-06 09:23