The official bitcoin price plunged 17% after BANDESAL (Banco de Desarrollo de El Salvador) purchased the equivalent of 21 million dollars (400 units) to set up the fund. BANDESAL then purchased a further 150 units of bitcoin (at a value equivalent to 7 million dollars), after which the market price suffered another drop.

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- Initial bitcoin price plunge
- Practical difficulties with the digital wallet
- Opacity and lack of consensus

Initial setbacks of El Salvador's Bitcoin adoption

Gorjon, Sergio. (2021). The Role of Cryptoassets as Legal Tender: The Example of El Salvador. Banco de España. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3944765

The Role of Cryptoassets as Legal Tender: The Example of El Salvador

There were several major difficulties with the roll-out of the digital wallet. The application was not available in several of the leading app stores, and suffered a series of configuration glitches, which ultimately resulted in access to the wallet being disabled until the lack of server capacity could be addressed.

Practical difficulties with the digital wallet

Due to concerns over El Salvador's adoption of bitcoin, many global investment ratings agencies downgraded their ranking of the country. The roll-out was accompanied by a noticeable worsening in governance, and rising tensions with the U.S. and the International Monetary Fund, at a time when the country was negotiating with the IMF on the subject of its debt. 

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