El Salvador’s decision to become the first country in the world to declare Bitcoin legal tender isn’t improving Bitcoin’s value.
Bitcoin was down over 10% in early trade on Wednesday, marking the most significant drop since Monday evening. According to CoinDesk, the price of Bitcoin has dropped from above $52,000 to less than $46,432. It dropped below $43,351 at one time.
Since El Salvador passed the bill clearing the way for the move on June 9, the market appears to have already priced in all of the upsides of the digital currency attaining legal tender status. Some investors may be selling after the country purchased 400 Bitcoins on Tuesday to preload government-run Bitcoin wallets called Chivo for people.
However, the implementation has not gone smoothly. El Salvador’s government had previously unplugged the Chivo wallet due to technical issues. Officials stated that they are now conducting tests in order to make it available for download later that day.
Businesses in El Salvador must accept Bitcoin for goods and services as of 3:00 p.m. ET today, while those with technological difficulties are excluded. Around the country, Bitcoin ATMs have been erected.
The law elevates Bitcoin to a new level of worldwide recognition, providing the cryptocurrency with the legitimacy that its proponents have awaited for years. But it isn’t without its detractors. The move, according to the International Monetary Fund, creates a number of difficulties, ranging from financial to legal. JPMorgan also stated that the move could have a negative impact on the country’s economy.
The law’s long-term impact on El Salvador’s infrastructure has also been questioned. The country lacks the same amount of internet and smartphone access as many other countries, which could impede Bitcoin’s adoption.