The price of Bitcoin has dropped nearly 10% after El Salvador officially adopted the cryptocurrency as a legal currency.
Bitcoin had been as high as $52,000 U.S. (its highest level since May) earlier this week ahead of El Salvador’s move to make the cryptocurrency legal tender, becoming the first country to do so.
Bitcoin dropped as much as 16% Tuesday (September 7). It was last down 9.5% and trading at $46,892.04 U.S. Other cryptocurrencies also fell, notably Ethereum, which is down 12% to $3,441.21 U.S. Cryptocurrency-related stocks MicroStrategy and Coinbase lost 9% and 4% respectively as prices slid.
On Tuesday, El Salvador temporarily disabled “Chivo,” its government-run Bitcoin wallet, to increase the capacity of the servers, which were hindering new users from installing it.
As part of the new law, businesses will be required to accept Bitcoin, the largest cryptocurrency by market capitalization, for goods and services, though merchants who aren’t technologically able to accept Bitcoin will be exempt.
El Salvador’s government has installed 200 Bitcoin ATM bank machines around the country. It also bought 400 Bitcoins worth about $20 million U.S. and is preloading Chivo wallets with $30 U.S. worth of Bitcoin for Salvadorans who register.
Bitcoin advocates have long insisted that there’s a strong case for Latin American markets using the cryptocurrency as a medium of exchange for remittances and even for central banks that experience high currency depreciation.
