Bukele attributed the missed opportunity for many Salvadorans to the actions of his beleaguered political opposition. Street protests erupted when the Congress made bitcoin legal tender in June 2021, although there were other underlying factors driving the protests.
The tiny Central American country has long relied on the dollar, but Bukele saw bitcoin as a means to provide new opportunities for the unbanked and cut out money transfer services from remittances sent home by Salvadorans abroad. The government offered $30 in bitcoin to those who signed up for digital wallets, and many took advantage of this offer but quickly cashed out.
At the conclusion of meetings between the International Monetary Fund and El Salvador's government in August, the IMF issued a statement highlighting the country's bitcoin holdings. It mentioned that while many risks have not yet materialized, further efforts are needed to enhance transparency and mitigate potential fiscal and financial stability risks.
El Salvador's former Central Bank President Carlos Acevedo pointed out that although there has been a gain, it remains unrealized until the government's bitcoin is sold. He credited Bukele's administration for their efforts on the bitcoin move, especially in light of Trump's election. Acevedo said the markets' optimism about a Trump administration being friendly with the markets and bitcoin explained its sustained rally over the past month. However, he also emphasized the cryptocurrency's persistent volatility.
The average Salvadoran may not be directly using bitcoin, but there are Salvadorans with economic resources who have already invested in it. It is a small group that has been affected by bitcoin's ups and downs.