On Tuesday, digital token Bitcoin crashed in value by over 10 percent from $52,500 to below $44,000, according to a report by CoinMarketCap. It partly recovered to reach a little over $46,700 at 11.30 a.m. EST. Other coins including Ethereum, Cardano, Binance Coin and Dogecoin also fell. This fall came after Bitcoin rose to $52,000 late Monday, which was its highest recovery since May.
The staggering losses on Tuesday wiped out the gains made just ahead of El Salvador beginning to accept Bitcoin as a legal currency. The loss within hours was said to have crossed over $410 billion according to CoinMarket Cap.
The Binance Coin lost around 13 percent, while Cardano’s ada fell lower by around 18 percent. The Dogecoin saw a very minimal loss. However, the Solano soared by about 8 percent. It has been rising steadily through the past week, climbing up by almost 36 percent.
During the crash, El Salvador managed to reap some benefits. President Nayib Bukele said that the El Salvadoran government took advantage of the crash and bought 150 additional bitcoins. The government now holds a total of 550 coins which are currently valued at about $25 million.
On Tuesday, El Salvador created history by making bitcoin legal tender. It has been the first sovereign government to do so. Residents can pay taxes, debts or conduct other transactions with bitcoin. American fast food giants such as McDonald’s and Panda Express have begun accepting bitcoin and more are expected to follow suite. However, those businesses that are technologically unable to make transactions in bitcoin are exempt from offering these services. The U.S. dollar, which was adopted in 2001, is still legal tender.
The government has also set up ATMs as well as a new currency wallet called Chivo. It has been partly developed by BitGo, a digital wallet firm based in California. In slang, Chivo means cool. The initial rollout faced challenges. The Chivo wallet was disabled, according to the El Salvador President, Nayib Bukele, as it was in the process of increasing the capacity of the servers.