Bitcoin Suffered A Massive Loss Of Over $9,000 In A Single Day
Bitcoin suffered a massive loss of over $9,000 in a single day
Bitcoin's price fell by $9000 to around $47,200 today, making it the most volatile day of the year so far for the cryptocurrency. This comes just hours after El Salvador became the first country in its 12-year history to formally adopt bitcoin as legal tender, causing its price to plummet.
As measured by the Bloomberg Galaxy Crypto Index, the value of the coin dropped by more than 10% in less than an hour after it crossed the highly anticipated $50,000 threshold. Within a few trading hours, the coin's value had plummeted by up to 19 percent.
FRNT Financial CEO and co-founder Stephane Ouellette stated in response to the crash that the cause of the crash may not be known because "the market remains far more opaque and global than the majority, if not all, other notable asset classes."
But she did point out that the "mysterious selloff" is the most likely explanation.
In the opinion of experts, the legitimate reason for such selloffs is frequently discovered only after a significant amount of time has passed. Even though Bitcoin is well-known for its volatility, the rapidity with which it has recovered in recent months and plummeted in the last few hours has taken many people by surprise.
El Salvador has been thrown into the mix
Following the purchase of the first batch of bitcoin, El Salvador, a Latin American country, became the first in history to accept bitcoin as legal tender today. The president of El Salvador, Nayib Bukele, announced on Twitter that he will be purchasing the sauce.
President Bukele later stated that 150 new coins had been introduced, bringing the total number of coins in circulation in the country to 550. He stated that he would purchase "significantly more."
Immediately following this announcement, the Salvadoran government's Bitcoin wallet, Chivo, announced an initial push to encourage adoption by providing users with $30 in pre-loaded currency upon registration with a Salvadoran national ID number.
A significant rebound in value for the coin followed, according to analysts, with its value rising to more than $52,000 as a result of this move. (It has increased by nearly 75% since late July.) The implementation of El Salvador's Bitcoin law was being commemorated today, and users on Twitter and Reddit were discussing plans to buy $30 worth of Bitcoin in bulk to mark the occasion.
In response to bitcoin's price increase, the prices of other cryptocurrencies rose in tandem today. According to CoinMarketCap, they are currently experiencing crashes that are similar to each other. Cardano has lost approximately 15 percent of its value today; Dogecoin has lost 20 percent; and Ether, the second-largest digital asset, has also fallen from $3,900 to approximately $3,000 in a matter of hours, making it the most rapidly declining cryptocurrency.
Maybe it's just a matter of time
It has been suggested by some commentators that the abrupt rise and fall of digital currency may have been caused by a stroke of luck. El Salvador is a one-of-a-kind event with an undeniable rarity in terms of scale and scope.
Alternatively, some believe that Bitcoin is experiencing another "September stroke." The only month in the last decade in which Bitcoin has failed to generate positive returns, according to data from Bloomberg, has been the month of September.
The outcome of today's event is certain. The ability of the coin to live up to its curse will only be determined by the passage of time.
