The reason for the drop came after a decline in US stocks following a broad sell-off triggered by the Chinese company Evergrande Group. However, the crisis spread to global markets. Analysts are warning of a turbulent week with a potential decline of up to US$41,000. In addition to other signs, it could be a respite for the currency, as traders cash in their riskiest assets to cover margin calls and remain on the sidelines until users feel confident.
El Salvador officially adopted Bitcoin as its legal tender on June 8, 2021. At the beginning of the currency collapse, President Nayib Bukele began calling for cryptocurrency support in the country. In addition to holding bitcoins, he tweeted that the drop could be good news.
“We just bought the dip. 150 new coins! El Salvador now has 700 coins,” Nayib Bukele posted.
Meanwhile, yesterday, Friday, the mega-real estate developer Evergrande Group registered an 11.61% drop on the Hong Kong stock market. Meanwhile, the Bank of the People's Republic of China banned all cryptocurrency-related activity, considering them a risk to national stability.