Hours after El Salvador made Bitcoin legal tender, the cryptocurrency fell in price.
On Tuesday Morning, September 7th, 2021, El Salvador became the first country to adopt Bitcoin as an official currency. The dollar is now legal tender throughout the entirety of the country. Yet despite months of planning, numerous errors occurred on launch day.
Many Salvadorians had issues starting their cryptocurrency accounts. Citizens were promised 30 USD worth of Bitcoin from the El Salvadorian government on the digital wallet app Chivo. This app was pulled from popular app stores by the government to deal with demand. In a statement on Twitter, President Nayib Bukele said,
“The system is offline while the capacity of the servers is being increased. This is a relatively straightforward problem, but it cannot be fixed with the system connected.”
Yet El Salvador’s cryptocurrency issues did not end there. The establishment of such a volatile currency as a part of a national market took a toll on the price of Bitcoin. Initially, the price of the cryptocurrency was around 52,000 USD. This dropped to 46,000 mere hours after Bitcoin was officially a part of El Salvador’s economy.
Many feared that this crash was to occur, based on the constantly fluctuating nature of the currency. Several Salvadorians state that the amount of money laundering will also increase. One thing is certain, however; though El Salvador is the first country to adopt cryptocurrency as legal tender, it certainly won’t be the last.