El Salvador became the first country in the world to officially accept Bitcoin as a legal tender. It was a monumental step in the crypto market, and the entire community was backing the decision. Even if the locals were skeptical of the move, the international community was very supportive.
In an effort to better promote Bitcoin in both the country and the overall market, President Nayib Bukele bought $20 million worth of Bitcoin, which amounted to almost 400. This massive purchase drove the price of Bitcoin up to $52,000.
Furthermore, the government also provided citizens with a state-issued wallet where they could store their crypto. Each wallet even had $30 worth of Bitcoin in it, to further promote the use of crypto among the citizens. With everything that the government was doing up to the launch of Bitcoin, it is surprising to see the market react in such a negative way.
Despite the support from the international community as well, prices across the crypto market dropped by almost 10%. In some cases, prices saw a decrease of over 15%. One of the main contributing factors to the fall of cryptocurrencies was the glitchy and buggy launch of the wallets. The troubled rollout saw the prices crash almost instantly.
On September 7, Bitcoin was trading at $46,300, but saw almost a 15% decrease in prices as it dropped to $45,488. However, despite the market falling so low, the government took advantage of the dip and bought more BTC. As of now, the Salvadoran government owns 550 Bitcoin tokens.
Experts and economists are concerned that, given the extremely volatile nature of the market, it might have a negative impact on inflation and prices in the future. This can prove to be quite the issue for El Salvador, as its new plan to bring about prosperity might just backfire.
Moreover, AFP conducted a survey to gauge the interest that people have about the new move from the government. The polls show that close to 6.5 million citizens in El Salvador reject or show no interest in using cryptocurrency. Instead, these over 6 million citizens will continue to use their traditional currency.
In an effort to make Bitcoin significantly more appealing to average consumers, President Bukele has even installed over 200 Bitcoin teller machines. Each machine will allow citizens to exchange their Bitcoin for cash, or buy more Bitcoin. Some of these ATMs have soldiers guarding them, to avoid arson attacks.
The Chivowallet will also be going under incredible maintenance following its very underwhelming launch. Even the president tweeted that they will be shutting the app down for five hours between 1 am and 6 PM. During this time, they will be updating the software and ensuring it has no further issues.