No Chivo Wallet Downloads in El Salvador This Year, Study Shows

EL SA2.jpgEl Salvador is the first country in the world to accept Bitcoin (BTC) as a legal tender back in September 2021.

While the President, Nayib Bukele gained popularity through the publishing of sterling data about the adoption of the cryptocurrency from September through the end of the Fourth Quarter, a new study shows the enthusiasm for the crypto adoption in El Salvador does not as promising as painted.

Shocking Reveals of the Study on El Salvador

The National Bureau of Economic Research (NBER), sponsors of the research claimed there have been virtually no Chivo wallets downloads this year. The Bureau noted that the downloads of the wallet were done primarily in order to gain access to the $30 incentive offered by the government.

Per the study, access to the Chivo wallet was not widespread as only citizens with access to mobile phones and the internet, of which almost 90% of the respondents deemed to use no mobile banking. The study revealed that September accounts for exactly 40% of all downloads.

“Most downloads took place just as Chivo was launched. In fact, 40% of all downloads happened in September 2021, and virtually no downloads have taken place in 2022. The main driver of adoption is reported to be the $30 bonus offered by the government, equivalent to 0.7% of annual income per capita,” the report highlights.

At the time when the country announced Bitcoin is a legal tender, many citizens took to the streets in riots, as they criticize their president as a dictator. The protests recorded in the initial period played out over time as many refused to download the Chivo wallet at all owing to distrust for the regime and their data, the NBER study corroborates.

More Rocky Headwinds?

There are numerous Bitcoin-linked plans that have been set out by El Salvador as unveiled by President Bukele. While most of the plans, including the scheduled Bitcoin bonds that are expected to be issued as well as the planned construction of a Bitcoin City, have still not been achieved.

Despite the broad support of the crypto community, the question is whether El Salvador is on the right track with its Bitcoin as a legal tender pursuit in the first place.

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Nayib Bukele Criticises U.S. Does Not “Stand for Freedom”, the Senate Comm Passes ACES Bill

El Salvador President Nayib Bukele has lashed out at the United States Government after the Senate Foreign Relations Committee passed the Accountability for Cryptocurrency in El Salvador Act (ACES) Bill, which is now slated to head to the full house for voting.


The ACES Bill seeks to monitor how El Salvador implements its Bitcoin law which grants the digital currency a legal status alongside the United States Dollar.

The bill will grant relevant U.S. agencies the right to monitor the impact of BTC as a legal tender on the country’s macroeconomic stability and public finances. It will also assess the role of Bitcoin in the rule of law in the country and its democratic governance. While the date of voting in the bigger house has not been announced, the bill grants the agencies the right to peek into the most salient aspects of monetary governance, including whether the country is adhering to relevant anti-money laundering rules.

Lamenting on Twitter, Nayib Bukele said he never dreamt of a time when the U.S. government would be scared of the work that is being done in the Central American nation. Bukele said the U.S. government does not support freedom as is popularly being said of the North American nation.

“The U.S. Government DOES NOT stand for freedom, which is a proven fact. So we will stand for freedom. Game on!” Bukele said in a tweet.

El Salvador’s adoption of Bitcoin as a legal tender has always met with resistance from prominent intergovernmental organizations. While the International Monetary Fund (IMF) and the World Bank are amongst those who have expressed pessimism concerning the country’s Bitcoin adoption move, the likely passage of the ACES Bill by the U.S. Senate has formed a more unsettling struggle for the El Salvadoran president.

Either way, things play out, Bukele is still arguably committed to Bitcoin’s financial freedom.

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El Salvador to Reform Laws to Favor Citizenship through Investment

Bitcoiners are looking to migrate to El Salvador for its reception to the crypto world may soon get more than just the warm reception. President Nayib Bukele is pushing for a number of policy reforms that will grant Citizenship by Investment to foreign investors. - 2022-02-22T104011.266.jpg

As contained in a recent tweet shared by President Bukele, he said he would be sending as many as 52 reforms to the country’s Congress so as to “remove red tape, reduce bureaucracy, create tax incentives, citizenship in exchange for investments, new securities laws, stability contracts,” adding that the country will seek to be a haven for freedom for anyone even as the rest of the world resorts to tyranny. In his own words;

“The plan is simple: as the world falls into tyranny, we’ll create a haven for freedom.”

El Salvador is a delight of many in the digital currency ecosystem, especially in regards to the proactive and advocate nature of Nayib Bukele when it comes to Bitcoin. First, he piloted the Central American nation to become the first in the world to adopt BTC as a legal tender. Then, he unveiled plans to float a volcanic energy plant dedicated to the mining of Bitcoin, and he also has plans to construct a full-fledged Bitcoin City, with decentralized and financial freedom being amongst the defining features.

Despite the country’s positive stance toward crypto, it has had a falling out with international organizations, including the World Bank and the International Monetary Fund (IMF), both of whom have shared concerns about the country’s BTC adoption plans.

Fitch Ratings has also downgraded El Salvador’s credit ratings recently as the financial institution said the country has struggled with repaying its short-term debts. The purported plans by Nayib Bukele to incentivize investments made into the country is arguably a seemingly smart move that can attract crypto companies as well as traditional companies to the country.

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El Salvador’s Nayib Bukele Foresees “Gigantic Price Increase” in Bitcoin

The self-proclaimed Chief Executive Officer (CEO) of El Salvador, President Nayib Bukele has showcased his level of trust in the price of Bitcoin (BTC) soaring to new levels through a new tweet shared on Monday.

Nayib Bukele, who has stirred El Salvador to not just adopt Bitcoin as a legal tender, but has also acquired over 1,800 units of the cryptocurrency believes the coin’s maximum supply of 21 million is a prerequisite for massive price upliftment in the short to long term. The vocal president compared the 21 million supply of Bitcoin to the estimated 50 million millionaires in the world.

Bukele says if the total number of millionaires in the world decide to acquire at least 1 Bitcoin each, that the coin will not be enough to go around.

In his words:

“There are more than 50 million millionaires in the world. Imagine when each one of them decides they should own at least ONE #Bitcoin. But there will ever be only 21 million #Bitcoin. No enough for even half of them. A gigantic price increase is just a matter of time.”

Bitcoin has become a major investment asset for a lot of people around the world. While individual retail investors are stacking up on the digital currency, corporate establishments are also bagging an enormous amount of the digital asset on grounds that it is a better hedge against inflation and a store of value. 

Today, corporations like MicroStrategy, Block Inc, and Tesla have thousands of units of cryptocurrency on their balance sheet, further driving down the supply strain the cryptocurrency is already known for.

While these companies with their acquire, have a lot to benefit from holding the coin, El Salvador also has much to gain should Bitcoin price retest its previous All-Time Highs (ATH) above $68,000 set back in November last year.

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El Salvador’s President Responds to IMF After the Institution Advises Country To Drop Bitcoin As Legal Tender

President Nayib Bukele is responding to the International Monetary Fund’s (IMF) warning that El Salvador should remove the legal tender status of Bitcoin (BTC) with a meme.

Back in September of last year, El Salvador became the world’s first nation to recognize Bitcoin (BTC) as an official currency.

The leading crypto asset has since gone on a roller coaster of price swings, climbing to an all-time high above $69,000 in November before a series of steep declines took it below $40,000 this month.

Now the IMF, after its annual bilateral meeting with Salvadoran officials, recommends that Bitcoin’s legal tender status be rescinded.

“There are large risks associated with the use of Bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities.

Some directors also expressed concern over the risks associated with issuing Bitcoin-backed bonds.”

President Bukele then took to Twitter to post an animated meme from the popular TV show The Simspons, where the character Homer Simpson performs a walking handstand while two other characters are speaking.

One of them shoos him away and responds dismissively,

“I see you, IMF. That’s very nice.”

Bukele routinely updates his followers when El Salvador buys Bitcoin, recently informing the world that he’d just scooped up over 400 BTC.

“El Salvador just bought 410 Bitcoin for only 15 million dollars.

Some guys are selling really cheap.”

The big buy follows several other purchases after Bitcoin’s price fell, including 100 BTC in November, 420 BTC in October, and 150 BTC in September.

At time of writing, Bitcoin is trading sideways on the day and priced at $37,428.

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El Salvador Is Now Over 31% Down on Its Bitcoin Bet

Key Takeaways

  • El Salvador’s Bitcoin investment has been hit hard due to the recent market crash.
  • The country’s Bitcoin reserves have suffered a 31% paper loss.
  • El Salvador has spent $88.4 million on assets that are currently worth $60.3 million.

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Bitcoin’s recent price crash has led to a 31.8% unrealized loss for El Salvador after it poured $88.4 million into the asset.

El Salvador’s Bitcoin Holdings Plummet 

El Salvador’s controversial Bitcoin strategy is being put to the test play after the asset’s rocky price performance over the last few weeks. The Central American country is now down over 31% on its investment in the asset.

In the last 30 days, Bitcoin has plummeted in value, tumbling from around $51,000 to $33,500 at press time. It’s struggled to find momentum since hitting an all-time high above $69,000 in November. While crypto investors have been lamenting the downfall, El Salvador has also been hit hard.

El Salvador memorably became the first country in the world to make Bitcoin legal tender back in September. Since then, President Nayib Bukele has led the country’s efforts to acquire Bitcoin, proudly announcing that it had “bought the dip” during various market retraces. To date, the country has spent about $88.4 million on 1,801 Bitcoin at an average price of $49,100 per unit. The recent downturn means that the country’s holdings are worth closer to $60.3 million today, giving an unrealized loss of roughly 31.8%.

El Salvador initially spent around $35 million on 700 Bitcoin shortly after accepting the asset as a currency. In October, Bukele announced that the country had acquired another 420 Bitcoin at a market price around $59,000. In late November, shortly after Bitcoin soared to its all-time high, it bought another 100 coins for around $54,000 each.

El Salvador’s monthly allocation continued in December as it added another 171 coins, ending 2021 with 1,391 BTC in its reserves. Bitcoin’s January 2022 dip made it cheaper for the Bukele-led government to add on its previous holdings. Last Saturday, the government bought more Bitcoin at its lowest price to date, adding 410 Bitcoin for $15 million. The country is now known to have 1,801 Bitcoin in its reserves.

The Future Outlook

While El Salvador’s Bitcoin adoption was a watershed moment for crypto, large international monetary institutions like International Monetary Fund and World Bank have repeatedly criticized the move. Salvadoran citizens also took to the streets to protest against the adoption policy.

The rollout has faced other technical problems, too. Citizens have faced inconveniences with making payments due to reported issues in the country’s official Bitcoin wallet, Chivo, and the Bitcoin ATMs it installed to allow crypto-to-cash withdrawals.

Despite the above, it is unlikely that Bukele’s government is looking to sell anytime soon. Bukele recently predicted that Bitcoin would hit six figures in 2022 and is currently working to launch the world’s first “Bitcoin City” in El Salvador.

While the crypto market suffered its most brutal dip in weeks Thursday through Saturday, Bukele appeared to see the funny side. On Twitter, he shared a photo of himself that had been edited to make it look like he was wearing a McDonald’s uniform, referencing a popular crypto meme that implies someone has to find a job at the fast food chain because they lost all of their money in a crypto downturn.

Disclosure: At the time of writing, the author of this piece owned ETH and other cryptocurrencies.

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Single inactive volcano has 90% chance of powering El Salvador’s Bitcoin City, according to president

El Salvador President Nayib Bukele has claimed officials will be able to use geothermal energy from one of the country’s inactive volcanoes to power its Bitcoin City project.

In a Sunday notice, Bukele said there was a 90% probability of using the Conchagua volcano to supply 42 megawatts — “enough to provide energy to the entire Bitcoin City,” according to the president. The El Salvadoran leader said the state-owned electrical company LaGeo was continuing to increase its production of geothermal power from different volcanoes in the country, with one of the sites believed capable of producing 95 MW.

Source: Twitter

Conchagua, located near El Salvador’s eastern border and overlooking the Gulf of Fonseca, has had no confirmed historical eruptions. According to Bukele, should the power consumption of the country’s planned Bitcoin City exceed the volcano’s capacity, it can be sourced from other sites. He said any energy surplus would also be used for mining Bitcoin (BTC) to add to El Salvador’s coffers. Bukele has previously announced several crypto buys totaling 1,391 BTC — more than $57.7 million at the time of publication following the brief price drop under $40,000.

Related: El Salvador: How it started vs. how it went with the Bitcoin Law in 2021

Bukele first proposed having LaGeo make some of its facilities available to BTC miners in June shortly after announcing his intention to make the crypto asset legal tender. In November, the El Salvador president said the country planned to launch a Bitcoin City funded by $1 billion in BTC bonds. Both crypto exchange Bitfinex and Blockstream have said they plan to support the initiative.

The president aims to have the Bitcoin City become a fully functional city with jobs in tourism, construction, commerce, and engineering. Residents will reportedly pay no capital gains, income, property or payroll taxes.