Bitcoin, Etheruem fluctuate amid El Salvador’s historic move

Bitcoin’s trading price declined to about 55 million won ($47,200) locally Wednesday afternoon, only 24 hours after it touched 60 million won for the first time in three months, data from Upbit, South Korea’s largest cryptocurrency exchange showed. The decline came as El Salvador became the world’s first country to adopt bitcoin as legal tender Tuesday.

Bitcoin, the original and largest cryptocurrency, hit the 60 million-won milestone on Feb. 20 and continued to rise to 82 million won on April 14, before plunging to below 40 million won. It has mostly been on an upward trend since mid-July until Wednesday’s sudden decline.

Ethereum, the second-largest cryptocurrency, also decreased from 4.5 million won on Tuesday to 4.09 million won Wednesday afternoon. 

The fluctuation in the cryptocurrency market came as El Salvador made a bold move to adopt bitcoin as legal tender. On Monday, Nayib Bukele, the 40-year-old president of El Salvador, said that the government purchased 200 additional bitcoins ahead of its adoption as currency. The country added another 150 bitcoins on Tuesday, bringing the country’s total holding to 550 bitcoins.

The historic move had initially pushed up bitcoin prices, but the market saw a two-digit percentage decline within the span of 24 hours.

The South American country’s move has faced protests by citizens who are angry about the adoption as well as technical glitches on Chiva, a government-backed digital wallet app.

In July, the International Monetary Fund warned against countries using cryptocurrencies as legal tender, citing cryptocurrency’s links to illicit activity, the possibility of threatening financial market stability and integrity.

By Park Ga-young (gypark@heraldcorp.com)