Copy-paste | El Salvador became the first country in the world to accept Bitcoin. Cryptocurrency immediately collapsed by 17%

The cryptocurrency market had some difficulty surviving a day that Bloomberg called the most serious test of all time.its existence - Latin American El Salvadorbecame the first country in history to open accepting bitcoin as a legal tender. The start was not very successful: the application provided by the government of El Salvador broke down immediately, and bitcoin plummeted by 17%.

Latin American El Salvador today became the firsta country in the world in which bitcoin is declared a legal fiat currency - from that day on, bitcoins can be paid at any outlet that has the appropriate equipment.

The ideologist of the experiment is the 40-year-old president of the countryNayib Bukele, who before his career as a populist politician, owned a company - a local distributor of Yamaha engines. The Bukele administration is going to spend $ 225 million on the experiment, a third of which will go to bonuses of $ 30 to everyone who installs the government-developed Chivo bitcoin wallet (Cool). The rest of the money will form an exchange fund in case bitcoin collapses and the population goes to exchange it for dollars (El Salvador has not had its own national currency for more than 20 years). A network of 200 ATMs has already been deployed for exchange in the country.

With Bitcoin, Bukele hopes to improveThe catastrophic state of the country's economy is to attract foreign investment and make financial services cheap, but the main thing is to allow citizens to receive commission-free money transfers from the United States, on which their survival depends: in 2020, Salvadorans received $5.6 billion from abroad (almost 20% GDP). Salvadoran authorities also hope to make the country an attractive destination for mining using geothermal energy from local volcanoes.

The innovation is subject to harsh criticism.economists and carries serious risks. WSJ says that after its announcement, the International Monetary Fund (IMF) slowed down negotiations on allocating a $1.3 billion stabilization loan to El Salvador. Officially, the IMF warned that giving a highly speculative asset the status of a means of payment risks taking the country's economy out of the control of the authorities and the central bank .

The experiment threatens with unpredictable consequencesfor the country's tax system, and fluctuations in the price of Bitcoin can cause sharp jumps in the prices of goods and services. Finally, if the population accumulates a lot of cryptocurrency and decides to exchange it for dollars, the government will not even have bad tools to control the situation - after all, in an economy running on dollars, it will not even be able to print money, The Wall Street Journal lists. In July, Moody’s downgraded El Salvador’s sovereign rating to “junk,” citing as one of the reasons the deteriorating quality of government, as seen in the Bitcoin story.

The first day of a grand experimentPredictably, it was not without glitches: at first the promised application did not appear in the App Store and Google Play, and when it appeared, users began to report the inability to log in, the disappearance of small amounts from the account and other bugs. Chivo had to be removed from stores for a while, but by evening in Moscow it was back and now operating, and President Bukele retweets a video of people paying with bitcoins at a local Starbucks.

A much bigger problem is the subsequentThe beginning of the experiment was the collapse of Bitcoin. This afternoon, the cryptocurrency, in its best traditions, fell 17% in a matter of minutes, falling to almost $43,000 - this is the sharpest drop since July. Bitcoin is currently worth around $47,000 (a 9% daily drop).

Reasons for falling, as often happens withBitcoin is difficult to analyze. Crypto traders tend to dump currencies after they reach certain limits, such as $40,000 or $50,000 for Bitcoin, say analysts surveyed by Bloomberg. Over the past 24 hours, the market closed a record volume since June ($3.6 billion) of long positions on Bitcoin - that is, bets on its growth, writes WSJ. On the eve, retail crypto investors, on the contrary, agreed to move Bitcoin up - activists on Reddit discussed a symbolic purchase of $30 worth of cryptocurrency each in support of the Salvadoran experiment.

The President of El Salvador does not seem to fallupset - at the peak of the collapse, Nayib Bukele tweeted: “We’re buying back the fall!” and reported that the government bought 150 bitcoins (about $7 million). Now Salvadoran reserves contain 550 bitcoins (about $26 million at the current exchange rate).