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Sharp drop in Bitcoin - it lost more than 15% on the day

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Sharp drop in Bitcoin – it lost more than 15% on the day

The price of the most popular cryptocurrency cut almost $ 8,000 to $ 44,000, after reaching its highest price since May.

The expected “D-Day” for Bitcoin did not pass in the best way or at least as expected by market analysts. The criptodivisa most widely used in the world went through in recent weeks, a period of extraordinary price recovery and 52,000 USD touched its highest values since May.

This Tuesday the expectation was set on the debut of Bitcoin as an official currency in El Salvador . Although it is true that the economy of the small Central American country does not have much influence in the global concert, the fact of being the first country that officially incorporated ” crypto ” as legal tender gave a strong bullish foundation to this issue.

But this afternoon the market reaction was surprising and untimely. The Bitcoin came to plummet by 15% and lost about USD 6,000, to return to $ 46,000. In this way, the virtual currency is still far from its best prices, reached in mid-April, around 65,000 dollars.

El Salvador became the first country in the world through which Bitcoin circulates as legal tender, an experiment that seeks to reduce the cost of remittances sent from abroad and that in the first hours suffered an interruption to solve a problem. technical limitation.

The measure spearheaded by the young and popular president Nayib Bukele, 40, aims to allow Salvadorans to save the 400 million dollars they spend annually on remittance commissions, mostly sent from the United States.

Last year alone, remittances to El Salvador amounted to nearly $ 6 billion, or 23% of its Gross Domestic Product, one of the highest proportions in the world.

Polls show that the majority of Salvadorans are skeptical about the use of bitcoin and distrust the volatility of the cryptocurrency that, according to critics of the initiative, could drive money laundering and increase risks for financial institutions. However, some citizens are optimistic.

“We have family in the United States, they can send there at no cost, instead the bank charges them (…) to send money from the United States to El Salvador, ” said Reina Isabel Aguilar, owner of a store in Playa Zonte, about 49 kilometers southwest of the capital San Salvador.

El Zonte is part of an experiment called ” Bitcoin Beach ” aimed at making the coastal town one of the world’s first Bitcoin economies.

In the run-up to launch, the government has already been installing ATMs from its digital wallet called ” CHIVO “, which will allow the cryptocurrency to be converted into dollars and withdrawn without commission.

Within hours of launching the service, it had to be interrupted due to “installation problems” that some users had, Bukele revealed on his Twitter account on Tuesday .

“Any data that they try to enter at this moment will give them an error. The system is disconnected while the capacity of the servers is increased. It is a relatively simple problem, but it cannot be fixed with the connected system,” he explained. ” Better slowly and with good lyrics, ” he added.

In the early hours of Tuesday, the Salvadoran digital wallet had not appeared on the application download platforms of Apple Inc, Google, and Huawei, prompting a series of tweets from Bukele, one of them with an “angry” emoticon with a red face.

“Release him! @Apple @Google and @Huawei, ” Bukele demanded. The wallet was later available from Huawei.

On Monday, the president had asked for patience in an attempt to moderate expectations of quick results.

“Like all innovation, the #Bitcoin process in El Salvador has a learning curve. Every road to the future is like that and not everything will be achieved in one day or one month,” Bukele explained on Twitter, a platform he uses. often to express yourself, report your achievements, or criticize opponents.

On the eve, El Salvador bought its first 400 bitcoins, which momentarily pushed the price of the cryptocurrency up more than 1.5%, to $ 52,700. The currency has been notoriously volatile. In April it rose to more than $ 64,000 and fell to $ 30,000 in May.

Some analysts fear that the fact that bitcoin is legal tender alongside the US dollar could cloud the prospects for El Salvador’s quest for a $ 1 billion financing deal with the International Monetary Fund (IMF).

After Bukele’s bitcoin law was passed, rating agency Moody’s downgraded El Salvador’s credit quality, while the country’s dollar-denominated bonds have also come under pressure.

Bukele has been accused of having authoritarian leanings after he sent troops to Congress last year to pressure lawmakers to pass laws. His tweet read: “We must break the paradigms of the past. El Salvador has the right to advance towards the first world ”.

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Stories under this byline are written/directed/published by the staff and editorial board of MegaloPreneur magazine. Some of the MegaloPreneur journalists may also be involved in investigating and finding facts.

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