El Salvador Merchants Thrive with Bitcoin Investments
On a beach in El Salvador frequented by surfers, merchant María Aguirre assures that it was “great” to have invested $2,200 in buying bitcoin four years ago because now, with the rise of the cryptocurrency, she has $19,000.
El Salvador made history on September 7, 2021, as the first country in the world to establish bitcoin as legal tender, at the initiative of President Nayib Bukele. Bukele has also made happy accounts in recent days, celebrating that the government accumulated 5,689 bitcoins, totaling 406 million dollars. “It’s not much, but it’s honest work,” he stressed.
The government’s investment in bitcoin has been protected through a “cold wallet,” managed offline to prevent external attacks from hackers. While the government celebrates its recent gains, few Salvadorans actually use the cryptocurrency, despite its record-high price of over $72,000.
In El Zonte, a popular beach known as “Bitcoin Beach” for its early adoption of cryptocurrency payments, merchants like María Aguirre have benefited greatly from bitcoin investments. Aguirre has been able to improve her business and living situation by purchasing home appliances and furniture with her cryptocurrency earnings.
Despite the success of bitcoin in places like El Zonte, where it is used for everyday transactions, a survey showed that 88% of Salvadorans did not use bitcoin in 2023. The introduction of cryptocurrency was meant to bank a population outside the financial system, but the situation has not changed significantly.
While some merchants like Blanca Castillo and Rosalina Franco have seen profits from bitcoin, there is always the risk of losing with the volatile cryptocurrency. As El Salvador continues to navigate the integration of bitcoin into its economy, the challenges of adoption and acceptance remain.