El Salvador locals don’t understand cryptocurrency and are cashing out Bitcoins

El Salvador’s President Naib Bukele celebrated when Bitcoin reached an all-time high and surpassed the $100,000 mark. The fact is that Bukele made a big bet on the cryptocurrency. In El Salvador, Bitcoin has been legal tender since 2021. The government’s reported investment is more than 600 million dollars to date.

The value of Bitcoin sharply jumped after Donald Trump won the presidential election. The newly elected president said he intended to nominate cryptocurrency supporter Paul Atkins as the next Securities and Exchange Commission chairman.

Bukele blamed the political opposition for many Salvadorans’ failure to capitalise on Bitcoin’s benefits. In June 2021, Congress recognised Bitcoin as a legal tender, and Salvadorans then went on mass protests.

It should be noted that El Salvador has long used the dollar as a currency. However, the president promised that Bitcoin would provide new opportunities for locals who do not have bank accounts. The government has offered $30 in Bitcoins each to those who sign up for digital wallets. Many Salvadorans did so but quickly cashed out the cryptocurrency.

Bukele wrote a Facebook post in which the opposition made a big mistake with Bitcoin, which affected many locals. Carlos Acevedo, former president of the Central Bank of El Salvador, said that despite the progress, many challenges remain. According to him, the government will not sell Bitcoin, while the Bukele administration has succeeded in promoting BTC, especially after Trump’s election. Acevedo also said the volatility of cryptocurrency is a constant risk.

Although most Salvadorans do not use Bitcoins, a few citizens invest in cryptocurrency. However, there are few of these people in the country. Many Salvadorans who cashed in 30 Bitcoins received from the government explained their actions due to their lack of understanding of financial matters and knowledge of how to invest appropriately. Therefore, they simply spent this money without considering the future growth of cryptocurrency.

At the same time, many people still use cryptocurrency for its intended purpose—to make payments. Today, this is much easier, as these payment methods are used in many sites and services, including the iGaming industry. This may help El Salvador put itself on the gambling map.

While preparing the article, our authors decided to learn for which gaming services people spend cryptocurrencies. Most often, Bitcoin and other types of cryptocurrencies are used for sports betting. Such a trend is observed all over the world. For example, in India, the fastest growing market, cryptocurrency bets are made on cricket. Most people use apps for this purpose and make bets from their smartphones.

We found this data on topical information sites, especially Cricketbettingapps, which is leading in search query statistics. Indian cricket betting apps presented here belong to well-known international bookmakers. But in other regions, people may bet more on different sports.

Following a meeting between the International Monetary Fund and the government of El Salvador, a statement was released mentioning the country’s Bitcoin assets. The IMF said many risks have not yet materialised.

Still, there is a common understanding of what further action is needed to increase transparency and mitigate potential Bitcoin-related dangers to the country’s budget and financial stability.