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Bitcoin Falls to Lowest in Month as El Salvador Rollout Falters

Bloomberg | Vildana Hajric | Sep 7, 2021

El Salvador president buys the dip - Bitcoin Falls to Lowest in Month as El Salvador Rollout Falters

Bitcoin plunged as much as 17% to its lowest level in a month as El Salvador’s crypto rollout appeared to be faltering.

The largest cryptocurrency fell as low as $43,050 in New York Tuesday, tumbling more than 10% in the course of an hour, before recouping about half the losses. The Bloomberg Galaxy Crypto Index, which tracks some of the largest digital tokens, lost as much as 19% at one point.

“Mystery selloffs, or selloffs where a legitimate reason is only found a significant while later are much more common in crypto than in other asset classes,” said Stephane Ouellette, chief executive and co-founder of FRNT Financial. “The market remains far more opaque and global than most if not all other notable asset classes.”

See:  El Salvador approves Bitcoin as legal tender – the first country to do so

The swiftness of the plunge was likely accelerated as more than 336,000 traders had their accounts liquidated over the past 24 hours, equal to around $3.6 billion worth of crypto, according to data from Bybt, a crypto futures trading and information platform.

“It didn’t surprise me that Bitcoin didn’t rally on the El Salvador news, but this pullback is weird, especially since it came mid-morning and not shortly after the news broke,” said Matt Maley, chief market strategist for Miller Tabak + Co. “If it was a ‘fat finger’ at a hedge fund or brokerage firm, it won’t be a problem. If it is something else, I’ll become a lot more worried.”

The retreat comes as Bitcoin faces one of its biggest test in its 12-year history as El Salvador became the first country to adopt it as legal tender. The Central American nation’s president, Nayib Bukele, said on Twitter that the digital wallet being used in the project can now be downloaded after it was shut down earlier because of technical glitches.

The wallet, known as Chivo, comes pre-loaded with $30 worth of the currency for users who register with a Salvadoran national ID number.

See:  Crypto in Canada: Where are we today, and where are we heading?

Users on platforms including Twitter and Reddit had discussed plans to buy $30 worth of Bitcoin en masse on Tuesday to mark El Salvador’s law coming into effect. The potential coordinated price pump echoes previous online campaigns targeting meme stocks like GameStop Corp.

Bukele also said during the price slide that he was buying the dip, commenting on Twitter that 150 new coins were added and that the country now holds 550 Bitcoin. “Cryptocurrency” and “cryptocurrencis” were trending on Twitter at one point.

 

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