Bitcoin plunges below $43,000 as El Salvador makes it legal tender

abdelaziz Fathi

Bitcoin price plunged 17 percent to near $42,000 at one point on Tuesday, triggering a major sell-off in the cryptocurrency markets that followed a massive bull run earlier this week. The cryptocurrency hasn’t traded at those levels since early August.

iPayYou Bitcoin

Major crypto exchanges, including Coinbase and Kraken, experienced outages as a result of the selloff.

The world’s largest, and most recognized, cryptocurrency hit as low as $42.900 as the selling intensified afternoon before paring some of those losses. Bitcoin rebounded as the day went on, now trading back above $46,500 at the time of writing.

The sharp drop means bitcoin had temporarily erased all its gains following El Salvador’s announcement that it will be the first country in the world to make the cryptocurrency legal tender.

Bitcoin prices jumped earlier today to a peak of $52,900 after El Salvador’s President Nayib Bukele said that his country held 550 bitcoins. The Central American nation has kicked off a radical monetary experiment that could see other countries follow suit and adopt bitcoin as a national currency.

In preparation for the major event, El Salvador’s parliament voted to establish a $150-million fund to facilitate conversions from bitcoin to US dollars.

Other cryptocurrencies also had substantially larger losses earlier in the session. Ether, which powers the Ethereum blockchain, was down more than 12% at $3,447.38 per unit, according to industry data aggregator Coinmarketcap.

Today’s free fall is the worst since China announced fresh plans to crack down on the cryptocurrency industry within its borders. At the end of June, a broad crypto crash wiped out about $1 trillion in market value after Beijing authorities ordered a halt to mining operations across various provinces.

China’s crackdown came in part to boost a state-backed initiative to launch a digital version of the yuan, which authorities are piloting on a limited scale so they can keep money flows under their strict oversight.

Alongside bitcoin’s fall, shares in payments company Square and intelligence firm MicroStrategy were trading down. Square, founded and run by Twitter CEO, posted $45 million in bitcoin-related impairment losses as a result of the cryptocurrency’s massive crash in the second quarter.

MicroStrategy, Bitcoin’s largest corporate investor, also posted a $424.8 million impairment loss on its crypto investment for the Q2 2021, during which the cryptocurrency’s prices plummeted more 40 percent.

Read this next

Uncategorized

Moscow Exchange reports $350 billion in November FX volumes

FX trading volumes continued its upward momentum at Moscow Exchange (MOEX) during November, buoyed by a steady rise in volatility coupled with a multi-year effort to bring new business to the platform.

Retail FX

Interactive Brokers’ volumes continue growth trajectory in November

Interactive Brokers LLC (NASDAQ:IBKR) has announced higher trading volumes in November, dwarfing the metrics for October and the same period last year by 20 percent.

Retail FX

Exness trading volume hits record highs for second consecutive ‎month

FX broker Exness’ trading volumes have breached new highs in November, building on the record-breaking turnover streak from the beginning of the fourth quarter. That has been aided by the economic impact from the Covid-19 developments and inflation concerns that apparently sent investors hunting for FX instruments to limit their risk exposure.

Institutional FX

Hedge-fund legend Steven Cohen invests in Dmitri Galinov’s 24 Exchange

24 Exchange, the OTC platform backed by Fastmatch founder Dmitri Galinov, has completed a fresh fundraising round of $14.25 million at an undisclosed valuation. The recent capital injection was led by Point72 Ventures, the venture capital firm of the hedge fund titan Steven Cohen.

Digital Assets

Can Coinbase make or break XRP? – (Congress, XRP rating, JP Morgan)

According to Coinbase’s Council, XRP has the highest rating among 28 cryptos – meaning it is the closest you can get to a security: 4 out of 5.

Digital Assets

Polygon (MATIC) delves deeper into blockchain gaming by partnering with GameOn

Polygon, the Layer 2 scaling solution for Ethereum, has announced a partnership with GameOn Entertainment to build new and different types of NFT games on the network as it seeks to expand into the blockchain gaming and NFT space in a major way.

Retail FX

David Beckham to promote GemForex across Asia

GemForex makes efforts to lead in trading conditions, execution times, safety of client funds and data security, according to the FX and CFD broker holding a Mauritius Financial License.

Retail FX

InstaForex extends sponsorship deal with Borussia Dortmund after German Cup win

InstaForex provides access to trading of forex, CFDs, stocks, futures, options, and cryptocurrencies as the FX industry goes multi asset to address the needs of an increasingly demanding client base. 

Digital Assets

Treasury Secretary Yellen still cant decide on digital dollar

Treasury Secretary of the US, Janet Yellen, has said that she still is not sure whether the US should go ahead and have the digital dollar and follow the example of other major countries including China and India in introducing the same.

<