Summary
Spanish-language analysis (Bitfinanzas, July 2022) of the apparent failure of Bitcoin adoption in El Salvador, approximately one year after the Bitcoin Law. Cites a National Bureau of Economic Research study, independent chamber of commerce surveys, and economic commentary to document the gap between Bukele’s promises and actual outcomes.
Key Points
- Only 10% of Chivo users continued Bitcoin transactions after spending the $30 signup bonus (NBER study, 3 economists).
- Independent chamber of commerce survey (March 2022): only 14% of people made Bitcoin transactions since September 2021; only 3% saw commercial value.
- El Salvador’s Bitcoin holdings had lost ~60% of their value during the 2022 market crash.
- Only 48 new Bitcoin-focused businesses registered in El Salvador since adoption — less than 2% of all businesses opened in 2019.
- The planned “Volcano Bond” ($1B Bitcoin-denominated government bond) was postponed indefinitely.
- Bukele assigned 15% of annual investment budget to Bitcoin adoption; the return was minimal.
- $30 incentive ~equals 1% of average annual Salvadoran income.
- Economist Fernando Alvarez (University of Chicago): “The government gave this project all the push one could hope for, and yet it failed.”
- Carlos Acevedo (former central bank director): “With Bitcoin, nobody is gaining anything… It’s an investment with no social return.”
- Rank Muci (LSE): “Bukele has shown he cares more about public image than good economic management.”
Newsletter Angles
- The Volcano Bond abandonment: Bukele promised to issue the world’s first Bitcoin-denominated sovereign bond, which would have bypassed the IMF entirely. Its collapse reveals the limits of crypto-maximalist sovereign finance.
- The “image vs. management” critique (Muci/LSE) — Bukele is essentially running Bitcoin as political branding, not fiscal policy.
- The social return argument: even if Bitcoin appreciates, the speculative gain accrues to the state treasury, not to the unbanked population Bitcoin was supposed to help.
Entities Mentioned
- El Salvador — subject of adoption failure analysis
- Nayib Bukele — president whose strategy is critiqued
- IMF — conditioned future loans on Bitcoin regulation; Bukele’s Volcano Bond was intended to bypass this
Concepts Mentioned
- El Salvador Bitcoin Experiment — this article documents the one-year assessment of failure
- Tokenomics — the $30 bonus as a failed coordination incentive
Quotes
“El gobierno dio a este proyecto todo el impulso que se podía esperar, y aun así fracasó.” (The government gave this project all the push one could hope for, and yet it failed.) — Fernando Alvarez, University of Chicago
“Con el Bitcoin nadie está ganando nada… Es una inversión que no tiene rentabilidad social.” (With Bitcoin, nobody is gaining anything… It’s an investment with no social return.) — Carlos Acevedo
“Bukele ha demostrado que le importa más la imagen pública que la buena gestión económica.” — Rank Muci, LSE
Notes
Spanish-language source. Written in mid-2022 at the height of the crypto bear market — context matters: Bitcoin had fallen ~60% from peak. The social and political critiques remain valid regardless of subsequent price recovery. The Volcano Bond failure is a key underreported element of the El Salvador story.