Bitcoin dropped by $6,000 after it became legal tender in El Salvador

17:05, 08 September 2021
Bitcoin dropped by $6,000 after it became legal tender in El Salvador Photo: Camilo Freedman/Global Look Press

The Republic of El Salvador became the first country in the world to make the cryptocurrency a payment instrument.

On Tuesday morning the most famous cryptocurrency Bitcoin fell by more than 13% from almost $51,000 to $44,672, according to CoinMarketCap. It is now being traded for approximately $46,500. 

At the same time Ether plunged by 12% to $3,441. 

Crypto adjacent stocks including MicroStrategy and Coinbase have reported that their services experienced delays and cancelations of transactions, as well as crypto exchanges. 

The Tuesday rollout faced tech problems. The government-backed digital wallet Chivo was not available on platforms like Apple and Huawei. Later, the app could not handle the high number of registrations so the authorities had to take it offline and improve capacity.

The country’s President Nayib Bukele said on Twitter that El Salvador was "buying the dip” and purchased 150 Bitcoins. The price went up a bit after the tweet had been posted.

The plunge comes after the currency became a legal tender in El Salvador, the first country to make such a decision. The country’s enterprises will have to accept Bitcoin as a means of payment with the exception of companies which are so far technologically unable to do so. 

The government has introduced 200 bitcoin ATMs around El Salvador and bought 400 bitcoins for an estimated sum of about $20 million, thus making it 550 in the country’s possession. 

More than 1,000 citizens gathered in the streets to protest against the country's adoption of Bitcoin on Tuesday. 

In September Bitcoin reached the $50,000 cap for the first time since May when the cryptocurrency surpassed $58,000 per unit.