Tag Archives: el salvador btc

Breaking News, Crypto

Crypto Crash on Bitcoin Day knocks $420 Billion off at Dip

Above: Photo by Michael Krahn on Unsplash with elements added by Lynxotic

Coming after a frenzied run-up the hand wringing is no surprise

On the big El Salvador day for Bitcoin to go live, for the first time as legal tender, naturally there were glitches. And the predictions for crypto in general and Bitcoin in particular to surge on the news were, backwards.

The longstanding stock market adage “buy on rumor, sell on news” once more proved itself as what is now being called a “crypto flash crash” knocked around $400 billion off the market cap of the previous 24 hour period, or almost 12%, as per CoinMarketCap at the time of this writing.

The president of El Salvador announced that his government used the dip to buy an additional 150 Bitcoin, above the 400 he had announced on the previous day, bringing the total to 550.

From CoinMarketCap:The global crypto market cap is $2.07T, a 11.91% decrease over the last day

  • The total crypto market volume over the last 24 hours is $227.12B, which makes a 66.15%increase. 
  • The total volume in DeFi is currently $30.41B, 13.39% of the total crypto market 24-hour volume. 
  • The volume of all stable coins is now $179.83B, which is 79.18% of the total crypto market 24-hour volume.
  • Bitcoin’s price is currently $46,893.62.
  • Bitcoin’s dominance is currently 42.55%, an increase of 1.17% over the day.

By 3:30 PM ET on Tuesday Bitcoin bounced back, the “discount” ended, for now, and recovered to around $47,000 after dipping to $42,870. The recent highroad been $52,732, with the all time high from April still intact above $63,000.

I many ways it seems as if Bitcoin and Cryptocurrencies appeared suddenly in 2021 out of the head of Zeus. Protean and fully formed, with billions and trillions in market caps, and all your sisters, brothers, cousins and even the Uber driver climbing aboard.

And the FOMO blog posts, where every hour an innocent reader is assaulted by a story, perhaps true, perhaps exaggerated and certainly foolhardy in retrospect, of an innocent putting their life savings into Dogecoin and suddenly having, theoretically, huge gains at their disposal.

Meanwhile, craggy faced, ancient stock market mavens would interject famous last words that now appear to be wise. However, all that notwithstanding, this week’s crash is nothing new or unexpected.

In reality, as can be seen from the graphic below, provided by Visual Capitalist, there have been so may crashes / corrections and doomsday prognostications since 2012 in Bitcoin that it seems like a miracle the there’s any thing such as Crypto at all.

There’s a reason it’s not dead and it’s in the DNA

The resiliency, far from a shock to those that have been around more than a fortnight, is kinda the point. When Satoshi Nakamoto built the system architecture of Bitcoin and since then inspired the over 8000 new crypto entities that have been developed, it was, just like the internet itself that was build to survive WWIII, supposed to be as indestructible as possible.

Like physical gold, which is considered have been adopted as a store of value partly due to its indestructibility and immutability (alchemy notwithstanding) the volatility and sometimes violent-seeming life story of Bitcoin is a necessary adjust to its role in finance, commerce and even individual monetary survival.

Not for the faint of heart, perhaps

While the mainstream and those forces opposed to the adoption or survival of Bitcoin and Crypto are out in force pointing to the “unsuitability” of Bitcoin and other cryptocurrencies for any “legitimate” use as a trade or savings vehicle, the progress so far, in spite of the obvious fact that volatility has always been baked in to the situation, is an obvious refutation of that viewpoint.

Will the current drop in dollar values relative to Bitcoin end it’s popularity and strip it of the respect it has thusfrar earned among many? In a word, no. In essence what is happening is, as many have foretold, what happens often and repeatedly, the excess attention and dollars that were pumped into crypto by you brother, sister, cousin and Uber driver are now getting blown out, since those were more speculation and psychosis than any kind of vote for viability or permanency.

And, why not? Where was to concern, shock and hesitation by the masses when the prices seemed to only rise for weeks and even months across so many products and coins it was impossible to keep count? Why was to feeding frenzy and the mania-like piling on not ignored as an anomaly?

The herd does as the herd will do. Diamond hands and Paper hands will ebb and flow as long as the rivers flow to the sea and humans herd like buffalo. And, in all likelihood, dollars and euros and yen will be long forgotten when the last bitcoin is transferred to the final wallet in the sky.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Lynxotic does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Find books on Money and many other topics at our sister site: Cherrybooks on Bookshop.org

Enjoy Lynxotic at Apple News on your iPhone, iPad or Mac.

Lynxotic may receive a small commission based on any purchases made by following links from this page

Breaking News, Business, Crypto, Observation

Bitcoin Nation? El Salvador is first to make it Legal Tender

El Salvador has officially legalized bitcoin as legal tender (alongside the U.S. dollar which is the country’s current national currency) starting today; September 7, 2021.

The day before the big day, President Nayib Bukele announced El Salvador had purchased 200 Bitcoins and later in the day confirmed that “we now hold 400 bitcoins”.  Given the current market prices, the country’s recent bitcoin purchases amount to roughly $20.8 million.  

In June this year, El Salvador’s Congress voted 62 out of 84 votes to establish the crypto coin as legal tender. This will make the small country is Central America the first in the world to recognize bitcoin as an official form of currency.

In a subsequent tweet Bukele’s translated tweet said 

Like all innovation, the process of #Bitcoin in El Salvador it has a learning curve. Every road to the future is like this and not everything will be achieved in a day, or in a month.

 But we must break the paradigms of the past. El Salvador has the right to advance towards the first world.

-President of El Salvador – Nayib Bukele

Bitcoin climbed nearly 2% to more than $52,680 as of Sept 6, and according to a market analyst with Reuters the cryptocurrency is on track to reach $56,000.

Salvadorians will now have the ability to use the digital coin in exchange for goods and services, and as an accepted form of tax payments by the government. Bitcoin is actually the second legal tender in El Salvador, with the US Dollar also having that status since 2001.

Upon its adoption, users who register with the country’s government supported Bitcoin wallet called Chivo will be awarded with $30 worth of currency pre-loaded (must have a Salvadorian national ID number). 

The overall impetus for legalizing bitcoin officially is, according to experts, that savings that will be possible for citizens to receive remittances – transfers, until now in US dollars, without intermediaries and the large fees they charge for international transfers.

Remittances account for more than 20% of GDP for El Salvador – mainly in the form of dollars sent by the approximately 1.5 million ex-patriots living abroad and wiring payments to families in El Salvador.

Western Union, for example, handles these transactions and charges a hefty fee. And those fees would represent a percentage (for small remittances up to 10%) of $5.9 Billion per year that flows into the small country from abroad, mostly from the United Stated, according to World Bank data.

Although there has been a lot of political rhetoric and expressions of opinion against the move, such an obvious adversary as the international wire transfer interests, like Western Union, and the large income from fees that may begin to dry up starting today, could easily explain at least a portion of the well represented opposition opinion.

That being said, the now famous price swings of Bitcoin do represent a real risk for people hoping to transfer directly into the country. Another risk is losing the coin due to lack of experience handling a digital currency, by people who are more likely to know the feel of paper dollars than digital screens, cryptocurrency exchanges and virtual wallets.

For observers, both crypto adherents and detractors, this is a very important opportunity to see what kinds of practical obstacles will arise and what benefits are realized by the El Salvadoran people.

It is also a kind of warning to those in governments, including in the U.S., that hope to stop Bitcoin’s seemingly inexorable rise, and to prevent what they perceive as threats to the public, and perhaps, to the U.S. dollar’s previously unchallenged hegemony.

The news that 400 Bitcoins were purchased by El Salvador was, naturally seen as a positive by the Bitcoin trading community, and there has been speculation of further pricing strength likely continuing going forward.

On the utopian dream side, various experiments have recently been announced related to Bitcoin and crypto. For example, in El Salvador there are emerging plans to make Bitcoin mining a state run operation with power being supplied by geothermal energy drawn from the country’s volcanos. How’s that for cheap, renewable resources?

A town in the U.S., fittingly called Cool Valley, MO has a mayor who recently announced that the city government is considering making payments to all residents of 1000 in Bitcoin. In this case, the idea behind the plan is to give citizens a crypto nest-egg, and the holders would be barred from selling, with the hope that, in the event the currency continues its exponential climb, the residents would benefit from holding it as an appreciating capital asset.

Which leads to the observation that, over the last few years, a fog of confusion appears to hang above the media regarding coverage of cryptocurrencies.

Price speculation is off the charts and there’s a kind of mania afoot. But the biggest confusion seems to come from one simple truth, that the U.S. dollar has gone only in one direction for more than 100 years, since the Federal Reserve was established in December 1913, down.

Against any measure of buying power for goods and services the dollar is continuously worth less, far less, on a yearly basis.

Although many headlines scream “Crypto and Bitcoin are Worthless” the same could be said of the U.S. dollar, in relative terms, against a basket of goods and services which is the traditional measure of “inflation” and against other assets, for example, now that Bitcoin provides a second measuring tool, dollars are worth less over time against bitcoin.

With prominent people and companies around the world and in the U.S. already supporting the idea of Bitcoin and Cryptocurrencies with their dollars and by choosing to hold crypto, it will be very interesting to see what transpires as these “currency wars” mutate and expand around the globe.

Articles from Around the Web:

More stories from Lynxotic:

Find books on Cryptocurrency and many other topics at our sister site: Cherrybooks on Bookshop.org

Enjoy Lynxotic at Apple News on your iPhone, iPad or Mac.

Lynxotic may receive a small commission based on any purchases made by following links from this page