Bitcoin Price Drops Dramatically as El Salvador Adopts Bitcoin as Legal Tender

Bitcoin on Tuesday became an official currency in El Salvador, to become the first country in the world to adopt bitcoin as legal tender, and the markets and crypto exchanges seem to be struggling. On Tuesday morning, the price of Bitcoin plunged from around $50,000 down to under $43,000 according to Coinbase — it seems that the country’s official Bitcoin app also hasn’t been able to keep up.

CNBC reports that El Salvador’s official crypto app, Chivo, was unavailable for new users to install on Tuesday morning. The country’s president, Nayib Bukele, has since announced that the app would be reopening for signups, though he did call the new uptime a “test.”

Major exchanges like Coinbase and Kraken have also reported having issues with payments or transactions not going through or being delayed. Not everyone is having issues with trading, though: Cash App reports no problems with its Bitcoin services, and Robinhood hasn’t reported any problems trading crypto assets either.

El Salvador passed a resolution to adopt Bitcoin as an official currency in June. President Bukele has championed the currency both in policy and on Twitter, though it won’t be the country’s only currency. (El Salvador has historically used the US dollar, which will continue to be accepted in the country.) Vendors who are able to will have to accept both currencies. The Salvadorian government argues that Bitcoin will help citizens who don’t have access to traditional banking or who often send or receive money from family in the United States.

The plan has provoked some significant backlash within the country. The country’s capital has seen protests from hundreds of retirees and veterans concerned about pension payments, as well as unions and workers. Demonstrators have cited concerns about the potentially unstable price of Bitcoin and how that could affect its use as an everyday currency. In response, President Bukele said that citizens were free to continue using the US dollar if they didn’t want to use the cryptocurrency.