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The Bitcoin Day Plunge
Bitcoin enthusiasts and meme investors thought El Salvador adopting BTC as legal tender on September the 7th Bitcoin Day would be a bigger deal than it actually was.
As a consequence, BTC recorded one of its largest percentage intraday movements as it was bid up to over $52900 early Tuesday, September the 7th [BTC Day], only to collapse [in tandem with other Crypto currencies] later in the day to below $43000 at one point, where the entire Crypto space was valued at $1.9 trillion.
BTC is the largest component of the Crypto space at around 50%.
Day traders and some other very large speculative [often leveraged] positions [estimates of over $4 billion was riding on the advent of Bitcoin Day] had plans to jump out at an appropriate moment and take profits from the past weeks of solid price gains, and with day traders playing yet another game of 'meme investor chicken.'
All Crypto exchanges reported malfunctions, glitches, halts, and delays on trading platforms throughout the day as the entire Crypto sector plunged in value.
Individual investors who day-trade on their smartphones (while drinking?) create a lot of price volatility, but in reality, it has no larger implications other than fuel and color investor sentiment one way or another.
Many believe Bitcoin is still in the early days of growth, and the sporadic - but intense - speculation that surrounds mostly meaningless media noise is just that: noise.
Hot on the heels of El Salvador, it was reported on Wednesday the 8th that Ukraine's parliament had also just approved of BTC/Cryptocurrencies as legal tender, albeit with different restrictions and regulations. This, along with other countries including Cuba and Panama, indicate that symbolically Crypto is here to stay, whatever some Central Bankers, The World Bank or IMF say to discredit it.
The fact remains that many countries and companies are increasingly evaluating Crypto's merits, as witnessed today with Mastercard acquiring Crypto compliance firm CipherTrace to expand its industry presence. This follows its recent payment agreements with Alchemy Pay and Coinbase to facilitate card payments.
To get to the specifics of what actually went wrong with 'Bitcoin Day' it would seem the wallet of El Salvador, the 'Chivo' could not cope with User Registrations and the volume of trades, so the Government as directed by President Nayib Bukele unplugged Chivo to connect it to more servers and increase capacity. At the same time, El Salvador took the price plunge as an opportunity to buy a further 150 coins to add to its existing 400.
It was reported that Starbucks, Pizza Hut, Panda Express, and all 19 McDonalds outlets in El Salvador were accepting BTC for payment later in the day.
While the youthful technocrat President Bukele enjoys widespread popularity in El Salvador, his embrace of Crypto and BTC specifically has alarmed many citizens where nearly half the citizenry doesn't have internet access or only gets poor connectivity.
Elsewhere Crypto evangelist Michael Saylor, the single largest holder of BTC through MicroStrategy [MSTR], of which he is founder and CEO, tweeted as an aside to the day's volatility, " if you aren't willing to hold BTC for ten years, don't even think about owning it for 10 minutes."
MSTR presently holds 108992 coins at an average cost of $26769 a coin or approximately $2.9 billion. The current valuation is now over $5 billion, which equates to a profit of over $2 billion on its investment since MSTR started buying in August 2020. So far, so good.
Coinbase [COIN], a recently listed market exchange for the entire Crypto space, has been informed that the SEC is investigating alleged wrongdoing in extending loans to customers.
As of writing, BTC is trading at $46780, MSTR at $646, COIN at $256.