Cryptocurrency market last week: Bitcoin suddenly plummeted to $ 45,000 after the El Salvador event

Cryptocurrency market last week: Bitcoin suddenly plummeted to $ 45,000 after the El Salvador event

Last week, Bitcoin suddenly plunged 17% to a 1-month low when it was revealed that the implementation of virtual currency in El Salvador has stalled.

El Salvador officially recognizes Bitcoin as a means of payment

On September 7th, El Salvador was the first country to accept Bitcoin as a valid payment currency.

Users on platforms like Twitter and Reddit are discussing plans to spend $ 30 on buying bitcoin on September 7th to mark the effective date of El Salvador’s bitcoin law. Bitcoin’s price synergies are pretty similar to the strategy of meme stocks like GameStop.

Cryptocurrency investors are watching whether a large number of people want to transact with Bitcoin and whether this will benefit the Central American country. If successful, other countries could follow in El Salvador’s footsteps.

El Salvador has started installing bitcoin ATMs so that people can exchange bitcoins USD. At the same time, the government also created a 150th fund Million dollars to help convert bitcoin to USD. El Salvadorans can download Chivo government digital wallet apps, enter an ID number, and enter 30. obtain USD in the form of Bitcoin, Finance Minister Alejandro Zelaya said last month.

However, the process of legalizing Bitcoin did not go smoothly when the Chivo digital wallet encountered a technical problem on September 7th. Bitcoin immediately crashed after this news.

Why did Bitcoin crash?

Edward Moya, a financial expert with consulting firm Oanda, said the price of Bitcoin had collapsed due to the “buy the rumor, sell the truth” phenomenon related to the legalization of Bitcoin by El Salvador. “Risk aversion has affected Wall Street. Hedge funds have sold digital currencies on a massive scale, causing prices to plummet,” added Mr. Moya.

The “buy rumors, sell facts” phenomenon occurs when investors rush to buy based on positive information that has not yet happened. But if the truth isn’t as expected, many investors could sell off massively, causing asset prices to plummet.

“Cryptocurrencies are attractive. But they are untested and especially complicated for a country like El Salvador. That is very risky, ”says Nathalie Marshik, CEO of Stifel Nicolaus & Co. identify.

In addition, according to Mr. Moya from Oanda, new traders and the wave of NFTs (non-fungible tokens) are causing too much euphoria in the digital currency market. “The market is ready for a correction,” commented Mr. Moya.

Red color covers the virtual currency market

On the morning of September 11th (Vietnam time), Bitcoin was above 45,300. acted USD, more than 9% less than 1 week ago. Other cryptocurrencies also fell, Ethereum, Cardano, Binance Coin, Dogecoin all fell more than 16%. In the top 10, only Solana was able to claim an increase of almost 27% in the past week.

The market capitalization of cryptocurrencies also fell to 2,068 Billion USD, from nearly 2,300 Billion USD 1 week ago.

Development of the top 10 cryptocurrencies

After El Salvador, Ukraine is also legalizing Bitcoin

Ukraine is the fifth country to have passed a law legalizing and regulating digital currencies. More and more countries around the world are accepting the existence of Bitcoin.

After a unanimous vote, the Ukrainian parliament passed a law to legalize and regulate digital currencies. The law is signed by President Volodymyr Zelenskyi.

Previously, Ukrainians were allowed to buy and exchange digital currency. However, companies and exchanges are often closely monitored by law enforcement agencies.

The new law provides fraud protection for owners of Bitcoin and other digital currencies. For the first time, legislators at the Verkhovna Rada decided to define key terms in the world of digital currencies such as crypto assets, digital wallets and private keys.

Unlike this week’s move from El Salvador, Ukraine’s digital currency law does not facilitate the adoption of Bitcoin as a means of payment. Digital currencies are also not equated with national currencies.

Vu Hao