Bitcoin Beach Dries Up: El Salvador Sees Decline in Active Use

Bitcoin payments in El Salvador's 'Bitcoin Beach' town of El Zonte have dried up, according to Jon Atack, a contributor to Bitcoin Core who has been living in the country. Atack reported that he was told by staff at a restaurant that his lunch payment was the only bitcoin transaction they had received all month.

Transactions in BTC have fallen from common to 'practically non-existent', with almost everyone paying with cards instead, according to Atack. The woman who served him mentioned that she had forgotten how to use her bitcoin app and showed little interest in reviving it, calling the local payment scene 'dead'. She had seen the habit form and then fall apart during her three years at the restaurant.

Atack's experience contrasts with a traveler who claimed to have paid in bitcoin without issue in the same area. Signs of acceptance were still visible around town, but the lack of active use is attributed to holders treating the asset as savings rather than cash, leading to a 'HODL' mentality that reduces the number of coins changing hands.

Bitcoin reporter Juan Galt pointed out that when everyone expects the price to rise, spending becomes 'counter-economic', and a circular economy needs people willing to spend coins they expect to go up in value. El Zonte's grassroots effort began with an anonymous donor seeding the town with bitcoin in 2019, which became the origin story for a national policy after El Salvador made bitcoin legal tender in September 2021.