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Salvadoran President, Nayib Bukele speaks during an event in May 2021. El Salvador become the first country to adopt bitcoin as legal tender in June.

Camilo Freedman | SOPA Images | LightRocket | Getty Images

It has been more than a year since El Salvador made history by becoming the first country to make bitcoin legal tender, and so far, 37-year-old resident Edgardo Acevedo has found the nationwide crypto experiment to be relatively anticlimactic.

“I don’t think anything has changed, except that the country is more recognized than before, but the economic life of Salvadorans remains the same or worse than a few years ago,” said Acevedo, a development engineer working in the capital city of San Salvador.

Acevedo, who is also known by the pseudonym Ishi Kawa, tells CNBC that while bitcoin has become a topic of conversation, adoption remains low, and he has personally found that there are very few businesses that accept the world’s biggest cryptocurrency — and even fewer Salvadorans who wish to pay in the digital token.

“What has improved is the issue of violence and crime, but economically, I can say that nothing has changed,” he said.

It has been a rocky time, with the project not living up to the grand promises made by the country’s popular and outspoken president Nayib Bukele.

The use of bitcoin in El Salvador appears to be low, as the currency has lost about 60% of its value since the experiment started and the country still faces plummeting economic growth and a high deficit. El Salvador’s debt-to-GDP ratio — a key metric used to compare what a country owes with what it generates — is set to hit nearly 87% this year, stoking fears that the nation isn’t equipped to settle its loan obligations.

Data from Bloomberg Economics shows that El Salvador tops its ranking of emerging market countries that are vulnerable to a debt default. Even as it retires some of its outstanding debts, the country’s domestic and multilateral loan obligations pose a real threat, in part because the world’s biggest lenders aren’t too keen to give cash to a country betting its future on one of the most volatile assets on the planet.

Pair these economic woes with a renewed war on gang violence and the country is barreling toward uncertainty.

“The government claims the developments as a success, but most local commentators and international watchers are underwhelmed,” Rachel Ziemba, founder of Ziemba Insights, told CNBC.

El Salvador's new bitcoin wallet could totally disrupt the remittance process

Bitcoin uptake appears low

When El Salvador’s Bitcoin Law came into effect Sept. 7, 2021, Jaime Garcia was hopeful that it would fix a few big problems with the way that Salvadorans send, receive and spend money.

As part of the law, prices are now sometimes listed in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax. But crucially, Bukele promoted the law as a way to expand financial inclusion — which is no small thing for a country where approximately 70% of the population does not have access to traditional financial services, according to the Bitcoin Law.

To help facilitate national adoption, El Salvador launched a virtual wallet called “chivo” (Salvadoran slang for “cool”) that offers no-fee transactions, allows for quick cross-border payments, and requires only a mobile phone plus an internet connection. It aimed to bring users onboard quickly, both to scale bitcoin adoption and to offer a convenient onramp for those who had never been a part of the banking system.

Bukele tweeted in January that about 60% of the population, or 4 million people, used the chivo app, and more Salvadorans have chivo wallets than traditional bank accounts, according to a Sept. 20 research note from Deutsche Bank. Still, only 64.6% of the country has access to a mobile phone with internet, that note says.

But a report published in April by the U.S. National Bureau of Economic Research showed that only 20% of those who downloaded the wallet continued to use it after spending the $30 bonus. The research was based upon a “nationally representative survey” involving 1,800 households.

Garcia, who lives in the Canadian province of Saskatchewan, fled El Salvador when he was 11 after rebels bombed his house, but he keeps in close touch with family and friends who stayed behind — and he sometimes sends money back home, too.

“There are pockets where bitcoin is popular, like in El Zonte, but it’s clear that adoption is not massive,” said Garcia.

“Big chains like McDonald’s, Starbucks, and most merchants at a mall will accept bitcoin — but are people using it? Not too much locally,” he said. “It’s mostly tourists using bitcoin.”

A survey by the El Salvador-based El Instituto de Opinion Publica, a public opinion think tank, found that 7 in 10 Salvadorans do not think the Bitcoin Law has benefited their family economy.

Another survey by the institute found that 76 out of 100 small and medium-size enterprises in El Salvador do not accept bitcoin payments.

“Bitcoin’s first year in effect has transcended from a commercial expectation to an irrelevant topic for traders,” said Laura Andrade, director of El Salvador’s Universidad Centroamericana, according to a CNBC translation of her Spanish-language comments.

Andrade said many large corporations are still advertising that they’re taking payments in bitcoin but are making excuses to not accept the cryptocurrency including saying their system does not work or the bitcoin wallet is out of service.

“The foregoing is evidence that this cryptocurrency, in reality, never had penetration in national commerce,” Andrade said.

“There seems to be evidence that most people used it primarily to get the free money from the government but have not used it on an ongoing basis given volatility and fees,” Ziemba said.

Meanwhile, those who did use the government’s crypto wallet reportedly had technical problems with the app. Other Salvadorans fell prey to schemes involving identity theft, in which hackers used their national ID number to open a chivo e-wallet, in order to claim the free $30 worth of bitcoin offered by the government as an incentive to join.

survey published in March by the Chamber of Commerce and Industry of El Salvador found that 86% of businesses have never made a sale in bitcoin, and only 20% of businesses take bitcoin, despite the Law’s mandate that all merchants accept the cryptocurrency.

“They gave people the wallets, they forced businesses to accept them, but essentially, in my opinion, it’s a big nothing burger,” said Frank Muci, a policy fellow at the London School of Economics, who has experience advising governments in Latin America. “Nobody really uses the app to pay in bitcoin. People that do use it, mostly use it for dollars.”

The experiment also involved building a nationwide infrastructure of bitcoin ATMs, but they’re too far away for many people to use.

Another hope for the chivo wallet was that it would help save hundreds of millions of dollars in remittance fees. Remittances, or money sent home by migrants, account for more than 20% of El Salvador’s gross domestic product, and some households receive over 60% of their income from this source alone. Incumbent services can charge 10% or more in fees for those international transfers, which can sometimes take days to arrive and require a physical pickup.

But in 2022, recent data shows that only 1.6% of remittances were sent to El Salvador via digital wallets. According to the Deutsche Bank report from September, part of the reason bitcoin transfers haven’t caught on has to do with the complications of buying and selling bitcoin for dollars. The report notes that “people who send and receive remittances frequently use informal brokers to convert local currency to and from bitcoin” and extremely volatile prices make buying and selling the cryptocurrency a complex task requiring technical know-how.

“This is a new money, a new way of doing things for a population that is very comfortable with dollars. This is a population that is largely unbanked and would rather deal with hard cash that they can see and feel,” Garcia said.

Miles Suter, the crypto product lead at Cash App, told CNBC on a panel at the Messari Mainnet conference in New York that the government’s 90-day rollout of the chivo wallet and nationwide adoption of bitcoin was “rushed” and that there are still a lot of problems.

“You shouldn’t mandate the acceptance of a specific currency,” said Suter, who spent six months in El Salvador in the runup to the passing of the Bitcoin Law. However, Suter added that the media perception is worse than how things are actually going on the ground.

“I saw and experienced lives being changed by having access to a new emerging monetary standard,” he said.

A look at El Salvador's crypto experiment after making bitcoin its national currency

‘Sleepwalking into a debt default’

Well before Bukele wagered that bitcoin would bandage over longstanding economic vulnerabilities, the country was in a lot of trouble.

The World Bank projects that the Salvadoran economy will grow by 2.9% this year and 1.9% in 2023, down from 10.7% in 2021. But that growth itself was a bounce-back from an 8.6% contraction in 2020.

Its debt-to-GDP ratio is almost 90%, and its debt is expensive at around 5% per year versus 1.5% in the U.S. The country also has a massive deficit — with no plans to reduce it, whether through tax hikes or by substantially cutting spending.

In a research note from JPMorgan, analysts warn that El Salvador’s eurobonds have entered “distressed territory” in the last year, and S&P Global data reportedly shows that the cost to insure against a sovereign debt default is hitting multiyear highs.

Both JPMorgan and the International Monetary Fund warn the country is on an unsustainable path, with gross financing needs set to surpass 15% of GDP from 2022 forward — and public debt on track to hit 96% of GDP by 2026 under current policies.

El Salvador faces a heavy mix of multilateral and domestic debts, including imminent debt repayment deadlines in the billions of dollars, such as an $800 million eurobond that matures in January.

“The domestic debt is very large, relatively short duration and needs to be rolled over frequently,” said Muci, who previously worked at the Growth Lab at the Harvard Kennedy School of Government.

El Salvador has been trying since early 2021 to secure a $1.3 billion loan from the IMF — an effort that appears to have soured over Bukele’s refusal to heed the organization’s advice to ditch bitcoin as legal tender.

Rating agencies, including Fitch, have knocked down El Salvador’s credit score, citing the uncertainty of the country’s financial future given the adoption of bitcoin as legal tender. That means that it’s now even more expensive for Bukele to borrow much-needed cash.

Beyond the fact that global lenders don’t want to throw money at a country that is spending millions in tax dollars on a cryptocurrency whose price is prone to extreme volatility, the IMF’s largest shareholder, the U.S., is targeting Salvadoran officials as part of wider international sanctions against “corrupt actors.”

The president’s efforts to consolidate power have also driven up this risk premium for global lenders.

Bukele’s New Ideas party has control over the country’s Legislative Assembly. In 2021, the new assembly came under fire after it ousted the attorney general and top judges. The move prompted the U.S. Agency for International Development to pull aid from El Salvador’s national police and a public information institute and reroute the funds to civil society groups.

Additionally, El Salvador can’t print cash to shore up its finances. El Salvador ditched its local currency, the colon, in favor of the U.S. dollar. Only the Federal Reserve can print more dollars. Meanwhile, its other national currency, bitcoin, is revered for the fact that it, too, is impossible to mint out of thin air.

“One of the big issues has been the fact that the bitcoin gimmick has distracted from the fiscal and economic challenges of the country and made it more difficult for the country to access IFI lending and preferential terms,” Ziemba said.

Ziemba added that there have been some swaps with major crypto firms that allowed the country to raise cash to pay off the debt due this year, and perhaps early next year, but the long-term debt sustainability remains a challenge.

“They’ve spooked the bejesus out of financial markets and the IMF,” said Muci, who tells CNBC that nobody wants to lend money to Bukele unless it’s at “eye-gouging rates” of 20% to 25%.

“The country is sleepwalking into a debt default,” Muci said.

El Salvador is using volcano power to mine bitcoin

Tourism and presidential popularity solid

On the day the Bitcoin Law took effect, Bukele revealed that the country had begun to add bitcoin to government coffers. Since then, the price of the cryptocurrency has plunged more than 60%, stoked by rising interest rates and failed projects and bankruptcies in the industry.

The government has an unrealized paper loss on bitcoin of around $60 million. None of these losses are locked in until the country exits its bitcoin position.

In aggregate, the entire experiment and all its associated costs have only set the government back around $375 million, according to estimates. That’s not nothing — especially considering the fact that El Salvador has $7.7 billion of bonds outstanding — but to an economy of $29 billion, it is comparatively small.

El Salvador’s millennial, tech-savvy president — who once touted himself as the “world’s coolest dictator” on his Twitter bio — has tethered his political fate to the country’s crypto gamble, so he has a very big incentive to make it work in the long run and to pay off the country’s debt in the interim. Bukele faces reelection for another five-year presidential term in 2024.

At least El Salvador’s big bitcoin gamble has been a win in terms of attracting bitcoin tourists.

The tourism industry is up 30% since the Bitcoin Law took effect, according to official government estimates. The country’s tourism minister also notes that 60% of tourists now come from the U.S.

The bitcoin experiment hasn’t hurt the president’s popularity either. Bukele’s approval ratings are north of 85% — thanks in large part to his tough-on-crime approach to leading. That’s no small thing to a country that was more dangerous per capita than Afghanistan five years ago.

Suter said the project has also introduced many locals to the concept of savings, noting that before the Bitcoin Law, much of the population didn’t have a way to digitally hold their money and transact among one another.

“It was all cash — and the cash that you earned that week, you typically spent it, because there wasn’t much ability to dream of growing it through investment.”

How bitcoin's mining activity could point to a bottom for the cryptocurrency

The president upped the ante in November when he announced plans to build a “Bitcoin City” next door to the Conchagua volcano in southeastern El Salvador. The bitcoin-funded city would offer significant tax relief, and geothermal energy rolling off the adjacent volcano would power bitcoin miners.

But now, Bitcoin City is on hold, as is the $1 billion bitcoin bond sale, which was initially put on ice in March because of unfavorable market conditions.

“Ultimately, El Salvador’s problems are just tangential to currency,” Muci said.

“The plane is gonna crash eventually, if they don’t change things,” he said — “if they don’t raise taxes, cut spending, start being much more disciplined, convincing markets that they’re sustainable.”

“Bitcoin doesn’t solve any of El Salvador’s important economic problems,” he added.

Bitcoin falls below $19,000 as Ethereum upgrade kicks into full gear

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1,500 new Colorado homes will come with geothermal heat pumps

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1,500 new Colorado homes will come with geothermal heat pumps

Over the next two years, homebuilder Lennar is outfitting more than 1,500 new Colorado homes with Dandelion Energy’s geothermal systems in one of the largest residential geothermal rollouts in the US.

The big draw for homeowners is lower energy bills and cleaner heating and cooling. Dandelion claims Lennar homeowners with geothermal systems will collectively save around $30 million over the next 20 years compared to using air-source heat pumps. Geothermal heat pumps don’t need outdoor AC units or conventional heating systems, either.

Geothermal systems use the sustained temperature of the ground to heat or cool a home. A ground loop system absorbs heat energy (BTUs) from the earth so that it can be transferred to a heat pump and efficiently converted into warmth for a home. Dandelion says its ground loop systems are built to last for over 50 years and should require no maintenance.

Dandelion’s geothermal system uses a vertical ground closed-loop system that is installed using well-boring equipment and trenched back into the house to connect to a heat pump. The pipes circulate a mixture of water and propylene glycol, a food-grade antifreeze, that absorbs the ground’s temperature. A ground source heat pump circulates the liquid through the ground loops and it exchanges its heat energy in the heat pump with liquid refrigerant. The refrigerant is converted to vapor, compressed to increase its temperature, then passed through a heat exchanger to transfer heat to the air, which is circulated through a home’s HVAC ductwork.

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Daniel Yates, Dandelion Energy’s CEO, called the partnership with Lennar a “new benchmark for affordable, energy-efficient, and high-quality home heating and cooling.” By streamlining its installation process, Dandelion is making geothermal systems simpler and cheaper for homebuilders and homeowners to adopt.

This collaboration is happening at a time when Colorado is pushing hard to meet its clean energy targets. Governor Jared Polis is excited about the move, calling it a win for Coloradans’ wallets, air quality, and the state’s leadership on geothermal energy. Will Toor, executive director of the Colorado Energy Office, said that “ensuring affordable access to geothermal heating and cooling is essential to achieve net-zero emissions by 2050, and we’re excited to be part of such a huge effort to bring this technology to so many new Colorado homes.”

And it’s not just about cutting emissions – geothermal heat pumps help reduce peak electric demand. Analysis from the Department of Energy found that widespread adoption of these systems could save the US from needing 24,500 miles of new transmission lines. That’s like crossing the continental US eight times.

Colorado is making this transition a lot more attractive through state tax credits and Xcel Energy’s rebate programs. These incentives slash upfront costs for builders like Lennar, making geothermal installations more financially viable. The utility’s Clean Heat Plan and electrification strategy are working to keep energy bills low while meeting climate goals.

Read more: This will be the first geothermal energy storage system on the Texas grid


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Polestar 2 removed from Polestar’s US website alongside tariff announcement

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Polestar 2 removed from Polestar's US website alongside tariff announcement

Polestar has removed the Polestar 2 from its US website header in an early sign of how new tariffs will restrict choice and competition for American consumers, thus increasing prices.

The Polestar 2 is Polestar’s first full EV – the original Polestar 1 was a limited-edition plug-in hybrid.

It started production in 2020 in Luqiao, Zhejiang, China, where Polestar and Volvo’s parent corporation, Geely, was founded.

And there’s the rub: while Polestar’s newer EV, the 3 (which we just drove the new single motor version of last week), is built in South Carolina, the 2 is not.

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Unfortunately, that interacts with some news that has been getting a lot of play lately: tariffs.

The US has been gradually getting stupider and stupider on the issue of tariffs, apparently determined to increase prices for Americans and decrease the competitiveness of American manufacturing in a time of change for the auto industry.

It is widely acknowledged (by anyone who has given it a few seconds of thought) that tariffs increase prices and that trade barriers tend to reduce competition, leading to less innovation.

It started with 25% tariffs on various products from China, implemented in the 2018-2020 timeframe. Then, in 2024, President Biden implemented a 100% tariff on Chinese EVs, effectively stopping their sale in the US. These tariffs included some exceptions and credits based on Volvo’s other US manufacturing, which Polestar had used to keep the most expensive versions of the 2 on sale in the US, while restricting the lower-priced versions from sale. Nevertheless, they were a bad idea.

Now, in yet another step to make America less competitive and inflate the prices of goods more for Americans, we got more tariff announcements today from a senile ex-reality TV host who wandered into the White House rose garden (which he does not belong in). These tariffs do not include the same exceptions as the previously-announced Biden tariffs.

Apparently this has all been enough for Polestar, as even in advance of today’s tariff announcements, the company suddenly removed its Polestar 2 from its website header today.

The change can be seen at polestar.com/us, where only the Polestar 3 and 4 are listed in the header area. On other sites, like the company’s Norwegian website or British website, the car is still there. The Polestar 2 page is still up on the US website, but it isn’t linked to elsewhere on the site (we’ll see how long it stays up).

We reached out to Polestar for comment, but didn’t hear anything back before publication. We’ll update if we do.

It makes sense that the Polestar 2 would still be for sale elsewhere, as it only started production in 2020. Most car models are available for at least 7 years, so this is an earlier exit than expected.

So it’s likely that all of the tariff news is what had an effect in killing the Polestar 2.

Then again, this is also just the second day of a new fiscal quarter. Perhaps the timing offers Polestar an opportunity to make a clean break – especially now that the lower-priced version of its Polestar 3 is available.

Despite the lower $67.5k base price of the new Polestar 3 variant, that represents a big increase in price for the brand, which had sold the base model Polestar 2 for around $50k originally, before all of these tariffs.

Update: Polestar got back to us with comment, but understandably, it doesn’t say much:

Polestar is a three-car company and Polestar 2 is available for customers now. There are a select number of Polestar 2s in stock at retailers that can be found on Polestar.com, but Polestar 3 and Polestar 4 will be the priority in the North American market.

Electrek’s Take

This isn’t the first car that America has been deprived of due to tariffs. The Volvo EX30, one of our most anticipated vehicles, and Electrek’s Vehicle of the Year for 2024, had its American availability pushed back due to tariffs.

Volvo decided to build the car in Belgium and export it to the US, but now that new tariffs apply to the EU as well, maybe that low-priced, awesome, fast, small EV will instead stay in Europe instead of being shipped overseas.

This shows how mercurial tariff fiats from an ignoramus are bad for manufacturing, as they mean that companies can’t make plans – and if they can’t make plans, eventually, they’ll probably just write the country making the random decisions out of their plans so they don’t have to deal with the nonsense.

And we’ve heard this from every businessperson or manufacturer representative we’ve talked to at any level of the automotive industry. Nobody thinks any of this is a good idea, because it objectively is not. All it does is make business harder, make the US less trustworthy, make things more expensive, and overall just harm America.

Yet another way that Americans are getting screwed by this stupid nonsense. 49% of you voted for inflation, and 100% of Americans are now getting it. Happy Inflation Day, everyone.


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Lucid (LCID) set another EV delivery record and the Gravity SUV is just getting started

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Lucid (LCID) set another EV delivery record and the Gravity SUV is just getting started

Lucid Motors (LCID) has now had six straight quarters with higher deliveries. The delivery record comes just as Lucid prepares to begin delivering its first electric SUV, the Gravity, to customers by the end of this month.

Lucid sets sixth straight delivery record in Q1 2025

Lucid delivered 3,109 vehicles in the first quarter, up 58% from last year and topping its previous record of 3,099 set in Q4 2024.

The company also produced 2,213 vehicles at its Casa Grande, Arizona, plant in the first three months of 2025, an increase of 28% from last year. Another 600 vehicles were in transit to Saudi Arabia, where they will be assembled at its new AMP-2 plant, Lucid’s first international manufacturing facility.

At this pace, Lucid will easily top the roughly 10,200 vehicles it delivered last year in 2025 at around 12,500. Lucid will likely see even more growth this year, with customer deliveries of its first electric SUV starting soon.

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During the Gravity SUV’s “celestial arrival” last week in NYC, Lucid’s interim CEO Marc Winterhoff said the EV maker is “nearly finished building all the vehicles that we wanted to build to put them into our studio and for test drives.”

Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Full-year 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Full-year 2024 Q1 2025
Lucid EV deliveries by quarter 1,932 1,406 1,404 1,457 1,734 6,001 1,967 2,394 2,781 3,099 10,241 3,109
Lucid (LCID) EV deliveries by quarter 2023 to Q1 2025

Winterhoff added, “by the end of April, we will resume customer deliveries of the Gravity.” Lucid delivered the first models in December, but they were for employees, friends, and family.

Lucid calls the Gravity a “no compromise” SUV with a range of up to 450 miles, 120 cubic feet of interior space, advanced technology, and sports car-like performance. The Gravity Grand Touring starts at $94,900, while the Touring model will arrive later this year at $79,900.

Lucid-EV-delivery-record
Lucid Gravity Grand Touring in Aurora Green (Source: Lucid)

The new delivery record comes after Winterhoff told Fox Business last week that Lucid has seen a “dramatic uptick over the past two months” in orders from former Tesla drivers.

Currently, “50% of all the orders we have are from former Tesla owners,” Lucid’s CEO said. Winterhoff added that many are “looking for an option to not continue having a Tesla.”

Will we see the trend continue? Tesla announced earlier today that it delivered 336,681 vehicles in the first quarter, far less than the 390,000 Wall Street analysts expected.

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