Bitcoin in El Salvador🇸🇻 is one of the greatest product-market fit failures ever 🤦♂️; When being late-comer is an advantage, or how Zelle dominated P2P payments 📲; FTX continues its buying spree
FinTech is Eating the World, 12 September
Good day Everyone,
And Happy Monday! Today’s issue is something I was really looking forward to since Friday. And it will be worth it 100% as today we’re looking at Bitcoin in El Salvador, which is one of the greatest product-market fit failures ever (with a long takeaway!), the late-comer advantage, or how Zelle dominated P2P payments (you’ll learn why distribution > product in FinTech), and FTX continuing its buying spree (but this one raises more questions than answers). Let’s jump straight into the interesting stuff:
Bitcoin in El Salvador🇸🇻 is one of the greatest product-market fit failures ever 🤦♂️
Throwback ⏪ This time last year, El Salvador made history by becoming the first country that adopted Bitcoin as legal tender, aka an official currency, alongside the US dollar. To manifest its decision, the Central American country bought roughly $20.9M worth of the most popular digital currency.
Today it seems like the greatest product-market fit failure ever.
The context 👉 The initiative was the brainchild of President Nayib Bukele, a 41-year-old populist whose approval rating of around 90% has emboldened him to reshape the country in his vision. These were the arguments for BTC adoption:
1/4 of El Salvador’s GDP comes from remittances (this is one of the biggest remittances-to-GDP ratios in the world). Bitcoin was said to reduce fees on those cross-border transactions.
This was aimed to bring more Salvarodans into the economic fold, the majority of whom don’t have a bank account.
President Bukele also believed that, by being an early adopter, the country could become a destination for foreign investment in bitcoin mining.
Finally, the President proposed to use geothermal energy from El Salvador’s volcanoes to power the energy-intensive mining process.
The facepalm 🤦♀️ The truth is that none of these promises and/or goals were met. In fact, Bitcoin in El Salvador🇸🇻 is probably the greatest product-market fit failure ever. Here’s more on that & the takeaway (it’s a long one!):