After Bitcoin was introduced in El Salvador: cryptocurrencies collapse

Enlarge image

Bitcoin as a means of payment in a shop in El Zonte, El Salvador

Photo: JOSE CABEZAS / REUTERS

Ironically, on the day on which Bitcoin first became legal tender in a country, the price of the digital currency collapsed significantly: the price of the oldest and largest cryptocurrency on the market fell to $ 44,444 in the afternoon.

This was the lowest price since the beginning of August and a good 14 percent less than the previous day.

Bitcoin had increased significantly since mid-July.

Before that, it had dropped to around $ 30,000.

The price of the second most important cryptocurrency, ether, fell even more sharply this Tuesday: it fell by almost 20 percent to $ 3,194.

The noticeable decline comes on a historic day for Bitcoin.

The digital currency Bitcoin has become legal tender in El Salvador.

When a corresponding law came into force, the Central American state was the first country in the world to take this step.

The law stipulates that every merchant who is technically capable of doing so must accept Bitcoin as a means of payment.

Rating agency Moody's downgrades El Salvador's creditworthiness

"Investors imagined their debut in El Salvador very differently," said analyst Timo Emden from Late Research.

Technical difficulties could have unsettled investors.

According to reports, there were problems with downloading the "Chivo" wallet in El Salvador, according to Emden.

In addition, investors fear that the developments in El Salvador could make supervisory authorities around the world more aware of cryptocurrencies.

The authorities around the world could start regulating Bitcoin more closely.

After the Bitcoin law was passed, the rating agency Moody's downgraded El Salvador's creditworthiness.

The slump in Bitcoin & Co also triggered a sell-off in other stocks in companies that deal with blockchain technology underlying internet currencies.

For example, papers from Coinbase, Riot or Marathon on Wall Street fell by up to ten percent.

The titles of the German Bitcoin Group, which operates a cryptocurrency exchange, lost a good five percent.

The titles of the software company MicroStrategy, which has invested billions in Bitcoin, fell 8.4 percent.

Bitcoin is the most popular digital currency.

It is not controlled by a central bank, but created by a decentralized, energy-intensive computer process.

The cryptocurrency is considered an object of speculation and is subject to violent price fluctuations.

hej / dpa-AFX