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Fall of more than 10% of bitcoin: its adoption as a currency in El Salvador does not suit the crypto market (for now)

Yesterday El Salvador officially adopted bitcoin as its legal currency. It thus became the first country in the world to do something like this after the approval of the project last June, but the entry into force of bitcoin as legal currency the cryptocurrency market has not done well at the moment.

In fact, after reaching highs of $ 52,000 these days, in the last hours the value of bitcoin has plummeted and currently trading at about $ 45,700. The drop is more than 10% right now, but it reached 16% and most cryptocurrencies have been contagious again and have also suffered very significant drops.

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Bitcoin plummets after its rallies of recent weeks

Analysts assure that the impact was expected: while in June the approval was more of a declaration of intent than it didn’t have much of an impact In the march of the value of the cryptocurrency market, the effective implementation of the proposal has caused important effects.

The acquisition of 400 bitcoins by the Government of El Salvador has contributed to this. The frenzy that followed the adoption of bitcoin as a logal currency caused Chivo, the official bitcoin wallet created in this country, will stop working temporarily so that the capacity of its servers will be increased.

The president of El Salvador himself, Nayib Bukele, announced on Twitter that temporary disconnection to manage to meet the demand of the mobile application that allowed to operate with bitcoin in this country.

Cryptocurrency exchanges like Coinbase also lost value and their customers faced transaction delays and higher commissions, and the company itself also had to publish Twitter updates to explain the situation, he was back to normal in a few hours.

Analysts such as Leah Wald, CEO of Valkyrie Investments, explained that this movement of cryptocurrencies was to be expected, and pointed out that if other countries also follow in El Salvador’s footsteps, “we could see the parable move higher, since the inertia that would be won with millions of people having instant access to cryptocurrencies would result in higher adoption, more HODLing and higher prices [de las criptodivisas]”.

In Panama one of its politicians, Gabriel Silva, announced this week the “Crypto Law”, with which the objective is to “make Panama a country compatible with the blockchain, crypto assets and the internet.” The proposal seems to open the door to the adoption of not only bitcoin, but other cryptocurrencies as legal tender in the country, but everything is yet to be seen in this case.

Via | CNBC