The selloff recorded on Tuesday in the bitcoin market, “broke” the upward series of almost 75% of the cryptocurrency since the end of July.
The total value of the global cryptocurrency market has fallen by about $300 billion in the last 24 hours, according to CoinGecko.
According to Bloomberg, the losses of bitcoin occurred after its adoption by El Salvador as an official currency, which has been described as one of the biggest tests in its 12-year history.
Today, the largest cryptocurrency in the world seems to be “picking up” yesterday’s losses. Its price was traded at around $46.000, having fallen 17% yesterday. Its downward trend also dragged the market of Ether and Dogecoin down.
“Social media platforms were very wary at the weekend that a dive could occur after El Salvador’s big day,” wrote Edward Moya, senior market analyst at Oanda Corp. Some investors probably bought in anticipation of the nation enforcing its Bitcoin law on September 7th, and then moved in to “sell the event” he said. Over the past weekend, analysts on social media have been particularly cautious of El Salvador’s move and have expressed concern about a possible dive on the first day of bitcoin in El Salvador.
El Salvador’s experiment with Bitcoin had a difficult start due to technical issues in the country’s official digital wallet, that were later addressed.
El Salvador’s President Najib Boukele announced via twitter that the country had taken advantage of the price collapse and bought an additional 150 bitcoins, increasing its total stock to 550 bitcoins, valued at about $25 million. Liquidations of $3.7 billion were made in the market during the same period.
Billionaire Mike Novogratz, CEO of Galaxy Investment Partners, said the digital currency market has been “running” fast over the past eight weeks and has become a “super-market”. Interest from individual investors has increased as large institutions have invested in bitcoin too, he said.
While El Salvador’s move may have been a factor in Bitcoin’s changes, other variables could also play a role in the infamous cryptocurrency industry. In particular, the prospect of reducing Federal Reserve support measures is a challenge for speculative assets, such as digital currencies.
It is worth noting that Starbucks and Pizza Hut, accept Bitcoin payments after the country’s adoption of the cryptocurrency. Twitter users also reported that they could pay for breakfast at McDonald’s with Bitcoin on Tuesday, the first day it became a legal means of exchange in the Central American country. Businesses are required to accept Bitcoin in exchange for goods and services, although traders who do not have the technological capabilities are exempt from the law.