Was El Salvador’s Bitcoin Launch a Target of Market Manipulation

Justin Freeman

el salvador bitcoin

The operational “challenges” facing El Salvador’s adoption of Bitcoin as legal tender are still to be fully revealed. For now, there’s an air of excitement. The American cryptocurrency evangelist Brock Pierce was in the country to help with cheerleading as the transition came into place. Even Pierce demonstrated an understanding of the difficulties ahead, saying:

“Like all things, I’m assuming it’s going to be less than perfect at first. But perfection is the enemy of progress.”

Source: Wired

The devout believers of the superiority of cryptocurrencies may be focussing on resolving technical glitches, such as Apps failing to process payments as well as expected. However, there are other factors to consider. One of the major concerns is that the move shifts the risk of price volatility from college educated American geeks trading crypto in their bedrooms to shop-keepers, cleaners, and other more vulnerable citizens of one of Latin America’s poorest countries. Businesses and workers in El Salvador are obliged to accept BTC as legal tender, so their revenues and assets will fluctuate in line with the highly volatile global price.

On Tuesday, when BTC dropped from above $52,000 to $43,000, the alarming price move demonstrated what might lie ahead for the El Salvadoran population. El Salvadorans paid in Bitcoin for services provided on Tuesday morning were effectively 17% poorer by tea-time.

bitcoin chart 080921

Source: IG

Did the US Authorities Just Spike the Bitcoin Price?

Tuesday’s events also raise some questions about market manipulation. The unregulated nature of the market that appeals to the maverick spirit of its supporters potentially left the door open to a concerted effort to drive down prices.

Firstly, despite the likelihood of technical glitches being associated with the roll-out, the move by El Salvador should have been positive for BTC’s price. It was a watershed moment for cryptos as the holy grail of being used as legal tender took BTC a step closer to being the currency of the future.

Bitcoin price moves are hard to explain at the best of times, but a surge in price would not have been surprising as the crypto announced a new dawn.

The Bitcoin price crash could demonstrate the financial establishment flexing its muscles. The temptation to derail El Salvador’s project would have been immense.

According to usethebitcoin.com the fourth-largest holder of Bitcoin in the world is the FBI. The US government and central bank benefit immensely from the role of the US Dollar as the world’s base currency. It could be said the dollar being the world’s reserve currency props up the US economy. With the authorities having everything to lose from BTC’s move into the mainstream, a bout of selling and a startling price crash would have been just what was needed to rain on El Salvador’s parade.

Is This A New Trading Signal for BTC?

No other countries are close to following the move of El Salvador. But if, and when, they appear, the high-stakes nature of the shoot-out between the US Dollar and Bitcoin could be a sure sign to sell up and stand out of the way.

If you want to know more about this topic or have been scammed by a fraudulent broker, please contact us at [email protected]


Justin Freeman

Latest news

State of the Nation – Up to Date Reports on Which of the Brokers Can be Trusted – Tickmill
Given the amount of technical and fundamental analysis that goes into running a successful investment strategy, it’s often surprising how many traders skip analysing the health of their broker. Read more
Patience is Rewarded – Is Now the Time to Buy The Dips?
Global US stock indices have started the week holding ground after several days of negative returns. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2011 Global CFD & FX Broker
Number One Broker
BEST FOREX BROKER Visit broker
5
#2 ForexTB logoYour capital is at risk Founded: 2015 Global Forex & CFD Broker
Number One Broker
LOWEST FEES Visit broker
4.9
#3 Tickmill forex broker logoYour capital is at risk Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#4 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#5 Forex Broker Pepperstone LogoCFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9

    Forex Fraud Certified Brokers

    Vantage FX logo
    Exness Small Logo
    ATFX Logo
    IC Markets Logo
    AvaTrade logo
    investous
    Plus500 Small Logo
    skilling logo
    Forex.com Logo
    FXTM Logo
    LegacyFX Small Logo
    OctaFX Logo
    BlackBull Markets Logo
    City Index Logo
    Pepperstone
    XM Logo
    HYCM Logo