El Salvador's Bitcoin “revolution” is failing miserably and behind the debacle are crypto evangelists from wealthier countries who cheered on President Bukele
ing rich down here!” https://twitter.com/... Tonya Garcia / @tgarcianyc : This story is unbelievable. “He doesn't behave as the president of an in-debt and poor country.” https://www.bloomberg.com/... via @BW @bw : El Salvador's bombastic president promoted Bitcoin as a solution to the country's economic problems. One year in, it's clear his “revolution” is failing https://www.bloomberg.com/... Sarah Kinosian / @skinosian : Bukele said a pet hospital would be built with Bitcoin profit, but El Salvador has lost some $53 million in its $106 million investment. Meanwhile in one public hospital, heavy rains flood the ER while doctors say they don't have laundry service. https://www.bloomberg.com/... Mike Dudas / @mdudas : I'm shocked that a sovereign country following the economic recommendations of @maxkeiser resulted in complete annihilation and utter failure https://www.bloomberg.com/...
Context & Ripple Effects
A year after President Bukele made Bitcoin legal tender and promised a pet hospital funded by 'Bitcoin profits,' Bloomberg reports the state is down roughly $53 million on its $106 million coin purchases — losses that had already surfaced when Bukele's 2,301-bitcoin stash lost about $56 million during the mid-2022 market crash. The same reporting documents the gap between the crypto-brochure version of El Salvador and the physical one: flooded ERs and hospitals without laundry service.
The arc was visible before the losses were: the New York Times had already traced how Bukele weaponized bitcoin to whitewash his government's growing authoritarianism, with evangelists from wealthier countries supplying the applause, and Rolling Stone reported funding sources drying up as the country slid deeper into crisis. The IMF later asked for Bitcoin's removal as legal tender — and per Reuters, 88% of Salvadorans didn't use it in 2023.
First-order effects
- El Salvador's treasury carries an unrealized loss of about $53 million on its $106 million Bitcoin position, money unavailable for the public services — laundry, flood repairs at one ER — that doctors say are failing right now.
Second-order effects
- The IMF's demand that Bitcoin be dropped as legal tender tightens the screws on a government Rolling Stone already reported as losing access to funding, making the coin holdings a bargaining chip in any future financing talks.
Third-order effects
- If the pattern holds, national-crypto adoption becomes a case study in the crypto legitimacy gap: foreign evangelists capture the narrative upside while the adopting country absorbs the balance-sheet and reputational downside.
The trend: State-level Bitcoin adoption is collapsing from a nation-branding experiment into a fiscal liability that lenders like the IMF now treat as a condition to unwind.