I believe the issue of high volatility is one of the major reason why IMF is issuing warnings to El Salvador. For IMF, investing in a high volatile asset is a red flag since IMF believe that the Bitcoin market can crash anytime and will incur losses to El Salvador's economy.
We know that IMF is a strong believer of centralized financial institution, so Bitcoin being decentralized is one negative point for IMF.
Bitcoin if taken seriously and with right regulation can surely help one country. It has been discussed and stated that Bitcoin can bring new jobs, potential business venture and start-ups that can give a country profit.
Not it doesn't, so called "crash" already happened but Bukele is no idiot. He is holding the bitcoins while spending the fiat.
Don't think of bitcoin as asset, think of it as currency. But different than fiat. Use what you must hold the rest. If you can hold all of it even better, but in a future without fiat income, then yes, you are going to spend some of it, but there is no need to get in debt or burn it all before it loses is value...
Yes, Fiat is designed to lose its value, its not a "maybe", it is intentionally made to lose value from their dogmatic economy beliefs (Monetarists). Instead the so called "volatility" of bitcoin, turns out when you zoom out the graph, that is not such. Long term its tendency is more than clear, even right now, its still valued higher than 3 years ago, think about it. At the same time, fiat has gone down worldwide, as designed to do, just a bit faster with govs overspending and abusing their powers to just "print more" whenever they feel like it.
Inflation is the worst of taxes, and govs can cause it at will, not Bitcoin...
If Bukele is an idiot or not, only time will tell. The fact is that he took a big risk when investing in bitcoin during a bearish market, and now luck must be at his side in order to not finish as an idiot on the story. As he is using fiat and keeping bitcoins untouched, he is creating more debt for the country through loans, while betting bitcoin can overcome the bearish scenario soon, so he can finally pay the debt created with profit from bitcoin investment.