Bitcoin nurses losses in wake of El Salvador’s glitched rollout

By Joanna Ossinger

Bitcoin was nursing losses Wednesday after plunging amid El Salvador’s troubled rollout of the largest cryptocurrency as legal tender.

The virtual coin was trading at about $47,200 as of 7:30 a.m. in Singapore, having slid as much as 17% a day earlier before paring some of the losses. The downdraft also swept across tokens such as Ether and Dogecoin, as well as the Bloomberg Galaxy Crypto Index.

“Social media platforms were very cautious over the weekend that a plunge could occur following El Salvador’s big day,” Edward Moya, senior market analyst at Oanda Corp., wrote in a note. Some investors likely bought in anticipation of the nation implementing its Bitcoin law Sept. 7 and then moved to “sell the fact,” he said.

El Salvador’s experiment using Bitcoin — the biggest test of its real-world usefulness — had a rocky start as the rollout was hampered by technical glitches to the official digital wallet that later appeared to be resolved. President Nayib Bukele said on Twitter the country now holds 550 Bitcoin after buying when the price fell.

Tuesday’s selloff is the most significant break in the rebound that had lifted Bitcoin almost 75% since late July. Overall cryptocurrency market value fell about $300 billion in the past 24 hours, according to tracker CoinGecko.

Billionaire Mike Novogratz, chief executive officer of Galaxy Digital Holdings and a long-time cryptocurrency bull, said the market for digital coins was running strong over the last eight weeks and became overbought. Interest from individual investors spiked on the back of large institutions jumping on board the crypto wagon, he said.

Oanda’s Moya argued that Bitcoin’s “fundamentals remain intact, as prices iron out a new trading range between the $46,000 and $53,000 levels.”

Traders will be monitoring Asian stocks tied to cryptocurrencies, after North American peers like Riot Blockchain Inc., Marathon Digital Holdings Inc., Coinbase Global Inc. and MicroStrategy Inc. tumbled.

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