BTC price tanks 12% on El Salvador Bitcoin debut, here are the key reasons

  • The government of El Salvador purchases additional Bitcoin during the BTC price dip.
  • Profit-takers have turned active after the solid rally in the crypto market over the last month.

On Tuesday, September 7, the BTC price came crashing down all the way to $43,000 in a broader market correction. This happens just on the day when El Salvador made Bitcoin its official currency alongside the USD.

As of press time, BTC is trading 12 percent down at a price of $46,389 and a market cap of $870 billion. In just the last 24-hours, Bitcoin has lost nearly $150 billion of its market cap. El Salvador continued to buy the Bitcoin dip.

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El Salvador’s Bitcoin rollout was not quite smooth as expected. Its digital wallet system Chivo crashed soon after going live as many citizens face installation problems. As a result, the government had to take the entire system offline. The government and its developers are working on it at the moment. In his recent tweet, El Salvador President Nayib Bukele said:

We will take advantage of the early morning to make adjustments to @chivowallet , improve the user experience and the problems that occurred during the day. We will disconnect the system from 1am to 6am to make these adjustments. Our teams are ready. We hope tomorrow is much better.

Currently, the Chivo mobile wallet is only available on the Google Play Store, which is the most widely used in El Salvador. However, this is currently open only to all versions of the Samsung Galaxy S20 and Samsung Galaxy S21. Bukele said that they will soon open it to other Android models in the market.

“The process of #Bitcoin in El Salvador has been a learning curve. Every step toward the future is like this, and we will not achieve everything in a day, nor in a month,” said Bukele.

The major reasons behind Bitcoin (BTC) correction

Well, Salvador’s Bitcoin adoption and system crash issues aren’t the major reason behind this shape BTC price correction. As we can see, the overall crypto market has tanked more than 13 percent in the last 24 hours wiping out more than $200 billion from the market.

Over the last week, Bitcoin and the altcoins space had rallied quite significantly at an unfathomable speed. Thus, any market correction at this point isn’t a big surprise as investors resolve to profit booking. Here are the possible other two reasons behind the recent market correction.

  1. One day before Tuesday’s crash, JPMorgan warned investors about buying crypto at this point. JPMorgan analysts claimed that retail traders have been hyping up prices even before any fundamental developments in technology. This was enough to create a negative sentiment triggering a major sell-off.
  2. Since mid-July, the crypto market has rallied in one direction without any major retracement. This extended uptrend was definitely scary with some top cryptocurrencies gaining 75-100 percent in a month’s time. With profit-takers entering the selling game now, the market is giving a strong reaction.

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About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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