In a surf town in El Salvador nicknamed "Bitcoin Beach," trader María Aguirre watched with delight as the cryptocurrency (and her investment in it) recently soared to new all-time highs.
The digital currency he purchased four years ago for $2,200 is now worth about $19,000, he said.
The price increase "has been fantastic and I'm very happy," the 53-year-old told AFP in El Zonte, where tourists relax on the beach and surfers ride the waves.
The cryptocurrency has been legal tender since 2021 in the Central American nation, and a sign at Aguirre's store selling food and soft drinks tells customers: "Bitcoin is accepted."
He said the rise of bitcoin had brought him greater "economic stability" and that the profits from his investment allowed him to buy a washing machine, a stove and a refrigerator.
Aguirre's store is surrounded by other small businesses that also accept bitcoins, as well as the U.S. dollar, which replaced the national currency, the colón, in 2001.
Tourists bathe in the Salvadoran coastal town of El Zonte, known as 'Bitcoin Beach' for its adoption of the cryptocurrency.
Marvin RECINOS
Located 58 kilometers (36 miles) southwest of the capital San Salvador, El Zonte earned its nickname due to its early and widespread use of cryptocurrency for payments.
"Bitcoin Beach" is also the name of an application used in the area to carry out transactions.
In 2021, El Salvador became the first country in the world to establish bitcoin as legal tender, at the initiative of President Nayib Bukele, who praised the cryptocurrency's recent strong performance.
Bitcoin hit an all-time high above $73,000 last week, helped by US authorities' decision to allow greater trading accessibility, although it has since given back some of its gains.
On the same day, Bukele announced that his country had stored more than $400 million in digital assets in an offline "cold wallet," which he described as "our first bitcoin piggy bank."
Bukele made bitcoin the official currency in an attempt to revitalize a dollarized economy dependent on remittances from abroad, despite warnings from the International Monetary Fund and the World Bank about its extreme volatility.
But not everyone in El Salvador is convinced of the cryptocurrency.
According to a survey by the Universidad Centroamericana, 88 percent of Salvadorans said they will not use bitcoin in 2023.
Trader Blanca Castillo says that although bitcoin has brought her benefits, she is wary of the cryptocurrency's volatility
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"What is clear is that people continue to use more traditional methods of sending (funds) and that has a lot to do with people's distrust of the volatility of cryptocurrency," independent economist César Villalona told AFP.
When Bukele introduced bitcoin, he also wanted remittances from families abroad – a key pillar of the Salvadoran economy – to be channeled through digital wallets to reduce transfer costs, but that did not happen.
In 2023, only one percent of the more than $8 billion in remittances came through digital wallets, according to the central bank.
On the side of a road in El Zonte, Blanca Castillo runs a store that sells artificial flowers and natural juices.
She is also delighted with bitcoin and the financial gains it has brought her.
However, the 25-year-old is also wary of sudden changes in the cryptocurrency.
"When you see that the value is going to go down, you feel that you are going to suffer losses... you have to be alert to its movements," Castillo said.
By the end of 2022, bitcoin was trading below $17,000, well below a previous all-time high.
Sitting in a chair in her small restaurant, owner Rosalina Franco said she serves many customers who pay with bitcoins, mostly foreign tourists.
The 70-year-old said she had difficulty transacting cryptocurrency over the phone, so "I save what I get paid in bitcoins. I don't spend it."
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