According to figures compiled by Cornell University, El Salvador boasts one of the highest Bitcoin ownership rates in the world, reaching over 70% at one point. Nevertheless, these numbers may be accurate, but you need to understand the situation behind them.
El Salvador’s Bitcoin Ownership has become a Virus: The Truth Behind the Numbers
El Salvador and its Bitcoin embrace are once again in the spotlight, affected by compliance measures following the recent $1.4 billion credit facility agreement completed by the International Monetary Fund (IMF). The figures derived from the global Bitcoin research by Cornell Bitcoin Group, which put El Salvador at the highest position on the global Bitcoin ownership scale, have gone viral on social media, but there is a catch.
According to a recently released report, more than 70% of all Salvadorans own Bitcoin at some point, but is currently owned by nearly 30%. Like Venezuela, this figure, which is well above the adoption breeding grounds, has a specific context behind them.
This may have happened, but Bitcoin has now been pushed out of fiat currency due to President Naive Bukere’s vision, and this rise was caused by the creation of Chivo wallets and the associated introductory airdrops.
As part of the government’s initiative to introduce Salvadorans to Bitcoin, Bukere sponsored the citizens $30 KYC protected airdrop, allowing them to experience Bitcoin for the first time. Still, most users dropped Bitcoin after cashing out.
A study conducted by the National Bureau of Economic Research (NBER) found that 60% of all recipients of this incentive abandoned Chivo.
Also, Venezuela, which boasts a high level of ownership, has a different set of important circumstances driving adoption, including high inflation levels and currency devaluation similar to Argentina.
Bitcoin fallout in the country is also evidenced by the lack of adoption in remittances, a major use case. Despite its most popular, Bitcoin was unable to achieve a significant share of the remittance market, and Salvadorans preferred traditional Fiat-driven alternatives. In June, these crypto flows represent less than 1% of total remittances.
Read more: Bitcoin transfer to El Salvador Surge is 300% ahead of BTC becoming fiat currency
Read more: Crypto transfers fell nearly 45% in El Salvador
