On Tuesday (September 7, 2021) El Salvador just became the first country in the world to welcome bitcoin as legal tender, regardless of extensive domestic doubtfulness and world wide warnings of threat for consumers.
The cost of Bitcoin dropped from more than $52,000 per coin, over 17%, to $42,000; El Salvador recuperated about half of that loss after they changed into the first country to embrace Bitcoin as legal currency.
The Take
In whatever way, El Salvador President Nayib Bukele said the digital wallet used for transactions was not functioning because the deployment had a problem in its first few hours. Since late July, the most remarkable break in the rebound that had boosted Bitcoin almost 75% is because of the last Tuesday’s buy-up.
The market value of cryptocurrency was knocked down by about $300 billion in just one day, according to tracker CoinGecko.
According to Bloomberg, the senior market analyst of the Oanda Corporation Edward Moya said that “Social media platforms were very cautious over the weekend that a plunge could occur following El Salvador’s big day.”
He even added the move to “sell the fact” on some investors likely to buy in anticipation of the nation implementing its Bitcoin law last September 7.
Professionals say that bitcoin was “unmoving” in the bull market provided that the price exceeds the $43,000 level. Galaxy Digital Holdings Chief Executive Officer and billionaire Mike Novogratz, also a cryptocurrency specialist, told Bloomberg that the market for digital coins was having a good performance over the last eight weeks and had been overbought.
Attention from independent investors jumped on the back of big institutions going on board the crypto-train.
The Catch
Attack of the 50 Foot Blockchain author David Gerard told the Corresponding Press that Tuesday’s Bitcoin unpredictability likely had nothing to do with El Salvador.
“My first guess was shenanigans, because it’s always shenanigans,” said Gerard. Gerard also added; “Bitcoin basically doesn’t respond to market forces or regulatory announcements,” and “That sort of price pattern, where it crashes hugely in minutes then goes back up again, is usually one of the big guys burning the margin traders.”
Because Bitcoin is so thinly traded, it could also have been a big holder making a large sale to have cash, thus sending the market for a ride.