Bitcoin Surges Above $50K Weeks After El Salvador Adopts Asset As Legal Tender
Leading cryptocurrency, Bitcoin has had an impressive run since the start of October. Following this, the digital asset surged above $50k on October 5 for the first time since Latin American country El Salvador adopted it as a legal tender in a law that became operable on September 7.
On the same day that El Salvador’s Bitcoin law took effect, the price of the digital asset suffered a decline as the adoption news failed to generate enough momentum to hold it steady or cause an uptrend. Price of Bitcoin fell from $53k to $47,500 at the time.
As if that was not enough, in the succeeding days, the price of the flagship cryptocurrency kept falling until it perched at the support zone of $40k. At the time, there were fears that the support lacked the strength to hold the asset. Bitcoin rose to $48k in the same month before losing its gains and dangerously hovered around $42k, from where it picked off to register its recent gains.
In the wake of this fluctuation, there were several critical reports from both high-profile individuals and institutions that El Salvador’s Bitcoin adoption was a fluke and would cause more economic problems for the country. Some Salvadorans had equally taken to the streets to protest the law, destroying and torching several Bitcoin ATMs and kiosks that president Bukele set up to aid the asset’s adoption.
$30 BTC Given to 3 Million Salvadorans Appreciates as Bitcoin Surges
With Bitcoin’s recent rally, there may be an opinion change in favor of the asset, especially from the 3 million Salvadorans who have reportedly downloaded and signed up on the country’s Bitcoin-focused wallet, Chivo when they discover that the value of $30 worth of BTC airdropped to them has appreciated.
Additionally, the 700 BTC purchased by president Bukele at different intervals amid last month’s extreme market volatility with the intention to hold has most likely appreciated by millions of dollars.
On the contrary, several Bitcoiners would argue that valuing El Salvador’s Bitcoin purchase in dollar terms is being wide off the mark. This is because when you place both assets side by side with Bitcoin being a scarce currency with a concurrent high demand and the US Dollar which keeps inflating but is in low demand, what you would always get is volatility and a protracted price increase.
High Remittance Costs Could Be a Thing of the Past in El Salvador
Notwithstanding, El Salvadorans can now boast of a solution to their long-standing remittance challenge, which president Bukele has cited as one of the main reasons for taking the bold step. It also gives them the ability to be self-banked, particularly for the large percentage of unbanked locals.
Meanwhile, El Salvador can now acquire more Bitcoin for itself beyond the 700 BTC it currently owns, following a Volcano-powered Bitcoin mining initiative that is still in the first stage. Already, it has been able to mine $269 worth of Bitcoin, according to recent reports.
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