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the price of Bitcoin It fell sharply on Tuesday, plummeting 19% from yesterday’s US$52,956 to US$42,900, offsetting its recent gains and erasing more than US$180 billion in market value. El Salvador, the country that officially adopted Bitcoin as its legal tender yesterday, does not seem to be worried about the decline, but has taken advantage of it. The country bought another 150 BTC as long as the price was right.
According to analysts, the reasons for the decline are obvious. After Bitcoin recently failed to break the major limit of $53,000, investors chose to sell when the price was still high. Since the end of last month, the value of digital currencies has risen by 12%. In April, Bitcoin set a historical record at $64,895.
El Salvador became the first country in the world to legally adopt Bitcoin and use it as legal tender. Every resident who opened an account with the government bitcoin wallet Chivo will receive a $30 bitcoin gift. This Central American country recently purchased 400 bitcoins at a price of approximately 17.5 million euros. Earlier on Tuesday, Salvadorans trying to download the Chivo digital wallet found it unavailable in the popular app store. A subsequent tweet by President Booker mentioned that the government had temporarily unplugged it to connect more servers to meet the overwhelming demand.
Although many people may try to open Chivo, most Salvadorans did not go to the newly opened Bitcoin machine to convert U.S. dollars into Bitcoin. The survey shows that Salvadorans are skeptical of using digital currency, mainly because they believe that its value fluctuates too much. People are used to a very stable dollar.
The fact that the value of Bitcoin fell sharply on the first day may not help generate the trust that President Nayib Bukele sought among his citizens. On Tuesday, more than 1,000 people marched in San Salvador, the capital of El Salvador, and their distrust of digital currencies reached a climax. be opposed to Use Bitcoin as legal tender.
Companies in El Salvador will have to accept digital currency in exchange for goods and services. The government will also accept Bitcoin to pay taxes. But protesters believe that the poorest people may struggle to allow them to use Bitcoin’s technology. Currently, nearly half of the population does not have an Internet connection, or the connection is very unstable.
But President Booker is full of trust. “Like all innovations, the Bitcoin process in El Salvador has a learning curve,” Booker said in a tweet. “Not everything can be done in a day or a month.”
With Bitcoin, it is cheaper for Salvadoran residents working abroad (mainly in the United States) to send money to their family in El Salvador. Salvadorans spend hundreds of millions of dollars in bank commissions each year to send dollars to their families.
El Salvador’s President Naib Bukler said on Twitter earlier that El Salvador plans to buy more bitcoins regardless of possible price fluctuations. In 2020, the gross domestic product of this small country exceeds 24 billion U.S. dollars. According to the latest data from the World Bank, 29% of the population lives below the poverty line. Currently, the country will still accept U.S. dollars.
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