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Salvaging Bitcoin Post The El Salvador Effect

bitcoin aug03 08sep21 lt

Bitcoin's tryst with legal tender status in El Salvador was a bumpy beginning marked by technical glitches and protests that triggered an unprecedented volatility that has shaken the entire crypto world.

On Tuesday, Bitcoin had touched a day-high of $52,853.76 in the run-up to being the legal tender in the tiny central American nation. On Wednesday, the lead cryptocurrency crashed by around 18 percent to touch a day's low of $43,285.21. It is currently trading at $46,197.21 which is a 6.7 percent gain from the day's low.

Rival contender Ethereum (ETH) too mirrored the panic in the crypto world as it crashed by more than 22 percent from Tuesday's day high of $3,945.31 to touch a day's low of $3,062.22. It is currently trading at $3,426.76, a 10.7 percent gain from the day's low.

The entire crypto market seems to have been beaten off its feet. Of the 15 top-ranked coins in terms of market capitalization that we have been tracking, all the coins have retreated from the previous day's highs and are making negative returns in a twenty-four-hour horizon.

Extreme volatility, or whipsawing prices would be the last thing that crypto world can afford to if it aspires for a pride of place among the investor community particularly the retail investor community. A few days ago, JPMorgan had said that cryptocurrency markets were 'looking frothy' with spike in retail demand at record pace.

A smooth transition as a legal tender would have been a major milestone for the market-leading cryptocurrency Bitcoin (BTC) and would have made crypto currencies the cynosure of all eyes once again.

The ride could be bumpy till the world of digital currencies demonstrate technical resilience in the progression to acceptance in mainstream financial world.

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