Bitcoin core contributor Jon Atack stated that after he paid for lunch with Bitcoin in El Zonte, El Salvador, the staff informed him that this was the first BTC payment received by the store this month; the staff mentioned that Bitcoin payments, which were previously common, are now "almost nonexistent."

Atack has been living in El Salvador since 2022. When he asked the staff about the current main payment method, they said that the vast majority of people use bank cards; he then offered to tip in sats, but an employee who has worked there for about three years said he had forgotten how to use the Bitcoin app and refused to accept it, stating that the local scene is "dead."

This experience comes from a single merchant and a one-time observation and cannot directly prove the volume of Bitcoin payments in El Zonte or all merchants nationwide. Atack himself defined it as a data point; travelers still report completing BTC payments locally, and some merchants retain signs indicating they accept Bitcoin.

El Zonte is known as "Bitcoin Beach," where an anonymous donor initiated a local Bitcoin project in 2019, combining Bitcoin distribution with community spending; El Salvador subsequently adopted BTC as legal tender in September 2021, attempting to expand this community practice into a national payment experiment.

The policy environment has changed. To secure an IMF financing arrangement of about $1.4 billion, El Salvador has committed to reducing Bitcoin participation in the public sector by 2024, removing the requirement for merchants to accept Bitcoin, and stopping tax payments in BTC; related amendments to the Bitcoin law are expected to be passed in February 2025, making BTC acceptance by merchants voluntary.

The decline in daily payments does not necessarily equate to the disappearance of Bitcoin's demand as a reserve or investment asset. Merchants and consumers using card payments in a dollar-denominated environment typically means lower operational thresholds, familiarity with instant settlement, and more stable accounting standards; if users expect BTC to appreciate, the motivation to hold Bitcoin may also weaken its use as a medium of everyday exchange.

From a market mechanism perspective, consumers and merchants shifting from BTC to bank cards will redirect payment flows back to banks, card organizations, acquirers, and the dollar settlement network; non-custodial wallets, Lightning Network service providers, and local BTC payment integrators will lose the network effects brought by high-frequency trading. Holders of Bitcoin may still benefit from price increases, but merchants and payment infrastructures attempting to establish a circular economy based on everyday consumption bear the pressure of declining transaction frequency.

Source: Public Information