Bitcoin crashes in value as El Salvador embraces it as legal tender

The popular cryptocurrency Bitcoin was launched for the first time as legal tender in a country and then crashed in value within hours.

Bitcoin’s value fell from 52,000 dollars to 43,000 dollars.

Amidst reports that popular platforms such as Apple and Huawei were not offering ‘Chivo,’ the digital wallet meant to hold and trade bitcoin, President Nayib Bukele stepped in and urged them to make the app available.

Once available on Huawei, and other platforms, ‘Chivo’ was overwhelmed with user registrations and Internet service providers are said to have encountered server issues.

However, the first day’s enthusiasm towards the country’s new legal tender did not prevent the sharp fall in the value of the cryptocurrency.

Why has President Nayib Bukele done this?

One of the President’s strong arguments is that the world is now talking about El Salvador.

He sees the current move as an announcement to the world that El Salvador is a free-thinking nation of the new generation.

Mr. Bukele even offers a residence in the country in exchange for an investment of three bitcoins.

President also sees this as an answer to the glaring lack of financial inclusivity in the country.

Nearly 70 percent of the country’s public reportedly lack banking access, and Mr. Bukele sees the introduction of Bitcoin as legal tender as a remedial measure. But, after the initial reward of $ 30 to all those who download the ‘Chivo’ digital wallet, what interest the people will show in the cryptocurrency remains to be seen.

The other side of the coin

El Salvador’s President Nayib Bukele seemed an idealist of sorts when he advocated for financial inclusion, but what ideal he tried to see in the cryptic world of cryptocurrency remains something of a mystery.

The cryptocurrency is known to have been used in illegal transactions worldwide, and countries such as the US and China have ‘seized’ billions of dollars worth of it in their law enforcement operations.

China not only has banned the use of cryptocurrency but has also cracked down on any operations that are related to it.

The cryptocurrency’s lack of transparency and environmental impact were cited by the World Bank, as it refused to help El Salvador with its introduction.