The cryptocurrency market experienced a sharp decline right after El Salvador finally launched Bitcoin as the country’s new official currency. It was a tough day for Bitcoin investors after the leading cryptocurrency finally broke the $50K deadlock. As soon as it went live in El Salvador, its price collapsed to one fifth below $50,000, hitting $43,000 before recovering.
Still, the recover wasn’t enough to stabilize the market. Bitcoin’s plunge has taken other coins with it, with Ethereum, Cardano’s ADA, and others also hitting lows not recorded in the past month.
The Dip Goes Over 18%
El Salvador’s planned Bitcoin launch didn’t exactly go to plan. Technical difficulties with the government-backed app Chivo and protesters on the streets have marred the historic feat. El Salvador is now the first sovereign country to use Bitcoin as legal tender, a feat that not one has done before.
Michael Saylor, a Bitcoin billionaire bull, has asked investors to buy $30 in BTC to show support for El Salvador’s feat. Not many investors did that, with a huge dip to follow later. While prices fell between 13% and 50% depending on the coin, the dip was all El Salvador needed. President Nayib Bukele announced on Twitter that the El Salvador government bough the dip with an additional 150 Bitcoins, bringing the total reserves to 550. Those are worth nearly $25 million, and will surely be put to good use.
El Salvador’s highly-coveted move comes after nearly a year of buildup. President Bukele decided to legally adopt Bitcoin as tender after the IMF refused to lend the country a $1 billion loan. Many believed Bukele’s Bitcoin switch claims to be a fluke, but not a year later, BTC is legal tender in the South American country.
A Bumpy Ride
After a few days with Bitcoin in El Salvador, it’s been a bumpy ride. Not that much because the experiment is not working, but because of the rough launch. There are still people in El Salvador who don’t believe the government should have done it, citing Bitcoin’s volatility as the main problem. Over 1,000 of them took to the streets on launch day, adding fuel to the fire.
Before the launch, the market was locked in positive sentiment, with Bitcoin finally breaking the $50,000 deadlock. Many experts believe that it would race up until the market crash that completely crushed the price. Numerous experts believed that El Salvador’s BTC launch day would see the price rise, but the complete opposite happened.
There’s no room for panic, though. No one expects this to last in the long run. It’s just a deep temporary deep and a nice way to get back into the market or start investing. El Salvador’s president bought the dip, so why shouldn’t you? The situation should be much clearer in the next couple of days, leaving plenty of space for investors to put their money on Bitcoin or the other dipped coins.