Bitcoin Crashes Day After El Salvador Accepts It As Legal Tender, Experts Call It Large Scale Economic Experiment

Bitcoin plunged as much as 17% to its lowest level in a month amid news El Salvador's crypto rollout was faltering is now trading at $46,935 on Thursday evening.

(Representative Image/Getty)

Mumbai: The price of Bitcoin, the world's largest cryptocurrency, crashed after El Salvador on Tuesday became the first country in the world to accept Bitcoins as a legal tender.

Bitcoin plunged as much as 17% to its lowest level in a month amid news El Salvador's crypto rollout was faltering is now trading at $46,935 on Thursday evening.

Whatever is happening in  El Salvador is a large-scale economic experiment, and the results of this monetary experiment will have ramifications for the entire world, believes Utkarsh Sinha, managing director, Bexley Advisors.
 
"It implies that countries may not keep control of their fiscal and monetary policy. I feel otherwise as I am of the view that each country should have control over its fiscal and monetary policies to save the economy from any shock. If we take Bitcoin as the official currency of El Salvador. The currency to GDP to currency ratio in El Salvador comes 0.07% compared to an average of over 10% in other countries, reducing the government's ability to fight or recover from a shock," Mr. Sinha told ABP News.  

El Salvador, accepting Bitcoin as legal tender is a watershed moment for the crypto industry, according to Sharan Nair, Chief Business Officer at Coin Switch Kuber, India's largest crypto platform with10 million registered users.

"The world is moving to accept Bitcoins in various forms. In the US, it is treated as a commodity, while in India, there is a debate about accepting it as an asset class or commodity. El Salvador is a poor country, and the big challenge will be to see how the masses adopt Bitcoin with lower smartphone and internet penetration," Mr. Niar told ABP News.