The Mass Chivo Bitcoin Letdown: Is El Salvador\'s BTC Experiment Failing?
El Salvador\'s adoption of Bitcoin as legal tender in 2025 represented a bold but ultimately flawed experiment in national cryptocurrency integration. This paper critically examines the state of Bitcoin usage and the impact of the Chivo wallet on the Salvadoran economy.
A year in to El Salvador’s crypto experiment, it’s clear the move is failing. Almost no one is using Bitcoin, and anyone who bought after Bukele made it legal tender has likely experienced significant financial losses. The initial hype surrounding Bitcoin as a solution to economic woes has largely dissipated, replaced by skepticism and disuse.
The cornerstone of the Bitcoin adoption strategy was the state-run Chivo wallet. However, its performance has been underwhelming. According to a research published by the US National Bureau of Economic Research, only 40% of Salvadorans (4 in 10) who downloaded the state-run Bitcoin wallet, and even fewer are actively using it for transactions.
Several factors contribute to this "mass Chivo Bitcoin letdown." Limited internet access, a lack of understanding of cryptocurrency, and concerns about volatility have all played a role. Furthermore, the mandatory nature of the initial adoption, coupled with technical glitches and security concerns with the Chivo wallet, alienated many potential users.
The future of Bitcoin in El Salvador looks uncertain. Under the IMF deal, the Chivo wallet will be either privatized or shut down entirely, and taxes will be payable in U.S. dollars instead of Bitcoin. This marks a turning point in the nation’s crypto journey, suggesting a retreat from its initial ambitious goals. Is this the end of the Bitcoin experiment in El Salvador? Only time will tell, but the current trajectory paints a grim picture for widespread Bitcoin adoption.
This analysis explores the various challenges faced by El Salvador\'s Bitcoin experiment and assesses its long-term viability. We delve into the factors contributing to the low adoption rates and analyze the potential consequences for the Salvadoran economy.