9 Sept 2021
El Salvador: Bitcoin Crashes after Troubled Rollout
The Index Today
The value of Bitcoin crashed to $43,000 on Tuesday, just one day after it was adopted as a crypto currency in El Salvador. The bumpy start of the launch of Bitcoin was caused by technical glitches and widespread protests in the nation.
President Nayib Bukele’s government spent around $7 million for the purchase of 150 Bitcoins. Chief economist Nana Otsuka said, “That has underscored the difficulty in trying to protect the value of Bitcoin as its own currency. The buying didn’t seem to be effective in halting its fall.”
According to experts, the initial phase of cryptocurrency in El Salvador is likely to face roadblocks just like another startup. The new currency is being promoted to unbanked Salvadorians as a means of saving money.
However, instead of having a positive effect on markets, investors began selling Bitcoin even after reaching a peak price surpassing $52,000. This impacted correlated cryptocurrencies such as Coinbase and Micro Strategy which fell by more than 3%.
The U.S Securities and Exchange Commission issued a wells notice to Coinbase Global Inc. which indicates intention of suing in court if the company continued with the launch of its interest-bearing lending products. This led to Coinbase shares dropping by 3.50%.