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]On Tuesday, bitcoin became legal tender in El Salvador. However, a government-issued digital wallet failed to keep up with demand, leaving a number of users unable to withdraw their money.
Although Bitcoin has been rather volatile lately, at the end of the day it is heading in a generally upward direction. There have been a few ups and downs along the way but here we are hovering just over 46,000 dollars per Bitcoin which is a lot better than where we stood on Monday although not as high as earlier in the week when we were over 53K for a brief period.
Cryptocurrencies continue to be decentralized and notoriously volatile, and while the exact causes behind such extreme fluctuations in value vary from one entity or another, there's some grounds for believing El Salvador's recent decision to make Bitcoin a legal form of tender is an important factor.
El Salvador's government created a digital wallet for its 6.4 million citizens to use, which would come with $30-worth of Bitcoin preloaded. This reminded this team members of the time when Apple's app store was overwhelmed by the sheer number of users trying to download an app at once recently!
Bukele, the youngest president in El Salvador's history at age 40 years old, made a joke about the current state of cryptocurrency prices on Twitter. It's possible that cryptocurrency traders who are vulnerable to sharp price drops will appreciate Bukele's jest about buying the dip , something common among cryptocurrency investors who are talking about how they're gaining more than they're losing by buying cryptocurrencies even when prices drop.
Many El Salvadorians shared videos of Bitcoin being accepted at Starbucks, McDonalds and other retailers -- videos Bukele gleefully retweeted. In a show of solidarity, followers from around the globe committed to buying $30 worth of the cryptocurrency on Tuesday -- dubbed "Bitcoin Day" in support of Bukele's cause.
Bitcoin is not widely adopted in El Salvador, but the currency remains available to make transactions. A thousand people recently gathered in San Salvador to protest Bitcoin's rise in popularity due to fear that it does not help the country's poorest residents.
President Bukele has stated that he hopes adopting Bitcoin into the country will encourage foreign investment and technological innovations. This will benefit the country by improving how they do business with other countries, especially since remittances contribute to approximately 24% of El Salvador's GDP. according to World Bank data.
El Salvador's government has rushed to welcome bitcoin for legal tender. However, the move has been met with considerable international backlash. The International Monetary Fund said that "adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis." Meanwhile, the World Bank said it worries about having to monitor payments made using bitcoins. "While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings," an official told Washington Post in June.
Bukele, sometimes called Latin America's first millennial president, has rebuffed the criticisms. When influential economist Steve Hanke called it a "crackpot" plan, Bukele replied: "Who is this Boomer?"
"We should break the paradigms of the past," Bukele tweeted just prior to the law going into effect. "El Salvador has the right to advance toward the First World."
