CoinMarketCap News, Sept 7: A Happy Anniversary? Gloomy Stats After 12 Months of BTC in El Salvador

The small, Central American country came into the Bitcoin game quite strong in 2021 — President Nayib Bukele made the cryptocurrency legal tender, sent $30 in BTC to each of its citizens, promised to raise $1 billion in Bitcoin bonds and unveiled plans to build a Bitcoin-shaped city at the foot of an active volcano, which would then serve as an energy source for BTC mining.

A year down the line, the bonds are TBD, the city is far, far from having any foundation laid... but at least the $30 was sent and oh, the volcano is still active.

If you look past the technical hiccups involved in the sending of Bitcoin to the entire country (because yes, there were loads of technical problems with the app at first,) the next question to ask is — are Salvadorans actually using BTC to buy and sell things? The answer, at least according to a National Bureau of Economic Research study in July, is no.

This study found that only 10% of Chivo (meaning "cool" in slang) users kept using the app after spending their $30, with almost no new downloads. A more meaningful number comes from the country's central bank. Salvadorans, whose country's GDP is about 24% remittances, used digital currency to send less than 2% of all remittances in the first half of 2022, despite Bukele's urgings and praise of the crypto's best use cases.

If the $30 BTC airdrop wasn't spent — and it might not have been spent, considering the app data numbers and the low usage by businesses — it would be worth about a third of its value today. Bitcoin is down to below $19,000 12 months on. If you're bad at math, Bitcoin was at about $52,000 when the coin became legal tender.

And — if you have a long memory — you might recall how this milestone caused the cryptocurrency to almost instantly plummet to $46,000.

Bitcoin plunged below $19,000 on Tuesday for the first time in two months. The correction was sudden and brutal. It comes after days of sideways action for BTC, which has failed to meaningfully stay above $20,000 since last Friday. Ether — which had been showing signs of strength as The Merge approaches — has also handed back gains from recent days. Crypto skeptic Peter Schiff added salt to the wound by tweeting: "Markets rarely give investors much time to buy the bottom. Bitcoin has been trading near $20,000 for the past 12 days. More likely $20,000 will prove to be a false bottom, giving suckers plenty of time to climb aboard a sinking ship. Better to abandon ship before the bottom drops out."

Exactly a year ago, El Salvador became the first country to adopt Bitcoin as legal tender. A lot has changed since then — with the world's biggest cryptocurrency plunging from $52,000 to $19,000. After early euphoria when BTC raced to a new all-time high of $69,000, it's been challenging as the bear market sets in. The value of El Salvador's Bitcoin investment has plummeted by $60 million, with gloomy market conditions delaying the launch of so-called "volcano bonds." Reports also suggest consumers rarely use BTC as a payment method, and many businesses don't accept it. There are some silver linings though, with the government claiming its pro-crypto policies have cultivated investment and attracted blockchain firms.

Interest in cryptocurrencies will continue to slow down in the second half of this year — and some businesses will go bust, according to KPMG. It's also predicted that coins lacking "clear and strong value propositions" will die out, adding: "That could actually be quite healthy from an ecosystem point of view because it'll clear away some of the mess that was created in the euphoria of a bull market." KPMG said the crypto space "experienced significant challenges" over the first half of 2022 — exacerbated by Russia's invasion of Ukraine. Despite the trying economic climate, it wasn't all doom and gloom in H1. Figures from KPMG show global investment in crypto and blockchain stood at $14.2 billion between January and June.

David Bowie's estate and OpenSea are teaming up to launch an NFT collection in his honor. The Bowie on the Blockchain collection aims to pay tribute to the Life On Mars singer, all while championing the work of nine digital artists. What's more, 100% of the proceeds that Bowie's estate receives are going to be donated to the humanitarian organization CARE. But despite the fact this collection aims to raise money for good causes, some of Bowie's fans are expressing staunch opposition to the sale. One claimed Bowie himself would be against the idea, and another added: "Don't do this. DB was ahead of his time on so many things, not just musically — the early days of the internet, etc. THIS isn’t novel or new. Not even interesting."

Crypto scammers are taking advantage of the cost-of-living crisis to dupe unsuspecting consumers, British officials have warned. The Financial Ombudsman Service has issued a scam alert after seeing a spike in fake investment schemes. Typically, victims are encouraged to buy crypto through a legitimate exchange — and after this, they're told to move the funds to what they're told is a genuine investment platform. From here, they're often given fictitious balances that make it seem like the value of their digital assets has surged substantially. But as soon as they try to withdraw funds, problems begin. According to the FOS, some victims have ended up losing hundreds of thousands of dollars in the most extreme cases.