Bitcoin Spending Grinds to a Halt in El Zonte
El Zonte, a small beach town in El Salvador that gained fame for its Bitcoin acceptance, has seen a significant decline in cryptocurrency transactions. According to Jon Atack, a Bitcoin Core contributor who lives in the area, one restaurant recorded only one bitcoin payment during an entire month.
The employee at the establishment told Atack that card payments have become the norm, with bitcoin transactions having decreased from common to 'practically non-existent'. The woman added that she had forgotten how to use her bitcoin app and showed little interest in relearning it, describing the local payment scene as 'dead.'
Analysts attribute the slowdown to a prevalent HODL mindset among holders, who increasingly treat Bitcoin as a long-term store of value rather than a medium of exchange. High price volatility reinforces this reluctance, making small payments seem like expensive mistakes if the price climbs later.
El Salvador's loan agreement with the International Monetary Fund led to merchant acceptance of bitcoin becoming voluntary rather than mandatory, giving businesses an 'off-ramp' back to card rails. For a restaurant in a small beach town, the calculation is straightforward: card payments are predictable, fast, and easy to reconcile.