Bitcoin Crashes After El Salvador’s Difficult Deployment

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A woman holds a “No to Bitcoin” banner during a demonstration against the circulation of bitcoin in El Salvador. Photo: AFP

Bitcoin’s (BTC-USD) downtrend continued on Wednesday morning with a 13.4% drop in its price, as El Salvador’s decision to accept crypto as legal tender encountered obstacles.

The world’s largest cryptocurrency was trading at $ 45,189, up from over $ 50,000 the day before.

Some Salvadoran citizens protested the move, fearing that bitcoin volatility could put everyday investors at risk and because the poor might not be able to access the technology. Criminal activity and illicit transactions are also of concern.

More than 1,000 people demonstrated on Tuesday against the country’s adoption of bitcoin.

“There is concern that by becoming a bitcoin haven the country may attract the wrong kind of investment from crime groups seeking anonymity,” said Susannah Streeter, senior investment and market analyst Hargreaves Lansdown.

The deployment also encountered technical issues. Initially, the government-backed digital wallet called Chivo was not available on platforms like Apple (AAPL) and Huawei.

Bitcoin collapsed on Wednesday morning. Chart: Yahoo Finance France

Later, the app could not handle the high number of user records and the government had to take it offline and increase its capacity.

When the price fell on Tuesday, Salvadoran President Nayib Bukele tweeted that the country was “buying the decline” and had bought 150 bitcoins, bringing the total number of bitcoins held by the country to 550.

“Rather than having a positive impact on the markets, investors were on a selling wave, although bitcoin hit its highest price since May, surpassing $ 52,000,” said Naeem Aslam, market analyst. in chief at Ava Trade.

He also said that stocks correlated to cryptocurrencies also fell, notably Coinbase (COIN) and MicroStrategy (MSTR) both fell nearly 4% and 9% respectively.

It didn’t help that major exchanges reported operational issues, which delayed trading “amid the market collapse.”

Read more: European markets collapse after gloomy Wall Street and Asia session

The story continues

To mark El Savador’s bold move, Twitter and Reddit users pledged to buy $ 30 worth of BTC on September 7, dubbed “bitcoin day.” The CEO of MicroStrategy was part of the growing movement.

Some Reddit users have even suggested that if the 3,316,862 community members each bought $ 30 worth of bitcoin on Thursday, $ 99,505,860 would be added to the cryptocurrency.

Streeter said that “a pump-and-dump scenario plays out in part after calls on social media forums were made for fans to buy slices of bitcoin to celebrate the bitcoin law in El Salvador. Some Speculators taking advantage of the previous sizeable gain may have triggered further falls. “

Watch: What is bitcoin?

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