Business World

Bitcoin tumbles over 10% on El Salvador’s first day using it

Bitcoin tumbled more than 10% on Tuesday, below the $43,000 mark.

The volatile cryptocurrency saw huge sell off as El Salvador made good on a plan announced in June and adopted the cryptocurrency as legal tender, making it the first country in the world to do so.

The move received some criticism in El Salvador, where people protested, as well as abroad.

Still the adoption as legal tender was in principle good news for the mainstreaming of bitcoin. But the crypto fell Tuesday on the “buy the rumor, sell the news” phenomenon related to the Salvadoran policy finally coming to be, said Edward Moya, senior market analyst at Oanda.

The Central American nation had bought 200 bitcoins previously, and it purchased another 200 late Monday ahead of the formal adoption plus another 150 on Tuesday, bringing the country’s total to 550 bitcoins.

The Caribbean nation will also give residents $30 worth of bitcoin with the download of the state-run Chivo wallet app to incentivize citizens to try crypto payments.

Bitcoin had traded as high as nearly $53,000 per coin Monday on the Salvadoran activity.

As the New York stock exchange opened Tuesday, the digital currency was more or less flat, and by midday it had fallen to a 24-hour low of $42,921.

Salvadoran President Nayib Bukele, a right-wing populist who rose to power in 2019, tweeted around midday that he was “buying the dip.”