Bitcoin News Today: El Salvador's 70% Bitcoin Adoption Falters Amid Low Sustained Use and Remittance Penetration

Bitcoin adoption in El Salvador has reached over 70%, according to a study by the Cornell Bitcoin Group, placing the country at the forefront of global cryptocurrency adoption [1]. This high rate is largely attributed to a government-led initiative that included a $30 airdrop through the Chivo Wallet, which introduced the cryptocurrency to a significant portion of the population. However, the surge in adoption appears to be driven more by initial exposure than by sustained use or widespread acceptance.

The airdrop, part of President Nayib Bukele’s broader vision to integrate Bitcoin into the national economy, allowed citizens to interact with Bitcoin for the first time. Yet, the majority of recipients cashed out their tokens shortly after receiving them [1]. A survey by the U.S. National Bureau of Economic Research found that 60% of airdrop recipients abandoned the Chivo Wallet after the initial transaction, raising concerns about the long-term commitment to using Bitcoin as a means of payment [1].

Furthermore, despite the high adoption rate, Bitcoin has not significantly penetrated the remittance market, which is one of the key use cases for the cryptocurrency. As of June, crypto-based remittances accounted for less than 1% of total remittance inflows into the country, with most Salvadorans still preferring traditional fiat-based options [1]. This indicates a disconnect between the government’s ambitious goals and the practical realities faced by the general population.

Another challenge is the low level of digital literacy and infrastructure readiness. Many residents lack the technical knowledge to securely manage their Bitcoin holdings, increasing their vulnerability to fraud and cyber threats [1]. While the government has launched educational campaigns, progress has been slow, and public trust in the technology remains limited.

Experts note that while the government continues to champion Bitcoin as a tool for financial inclusion and economic growth, the actual utility and acceptance of the cryptocurrency remain constrained. The success of the digital strategy will depend on addressing the underlying barriers, including infrastructure gaps, education, and trust, to ensure that the technology is both accessible and useful for the broader population [1].

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[1] Yes, Bitcoin Adoption Reached 70% in El Salvador, but There’s a Catch (https://api.news.bitcoin.com/wp-json/bcn/v1/post?slug=yes-bitcoin-adoption-reached-70-in-el-salvador-but-theres-a-catch)