Bitcoin, protests are growing in El Salvador

Bitcoin, protests are growing in El Salvador


Many people took to the streets in El Salvador to protest the law that turned bitcoin into a legal tender in the country. Protests intensified Wednesday, on the country’s independence day, with the local press reporting the fury of citizens against the new law. Protesters set fire to a bitcoin ATM in the capital San Salvador. Some took to the streets with signs saying “We don't want bitcoin” and “No to dictatorship”.

President Nayib Bukele attacked citizens on Twitter who did not stop the vandalism, even lashing out at the press. In reality, the protests against the decision - born from an idea of ​​President Bukele himself - had already started between last July and August, but today the protests have been by far the most ferocious, with thousands of citizens taking to the streets, according to local media.

Credit: Pixabay Salvadorans are not only protesting against the bitcoin law, but also against President Bukele, who some believe has weakened the country's courts and consolidated too much power. Although Bukele previously did well in opinion polls to improve security in the small Central American nation, he has lately been criticized for authoritarianism.

The bitcoin law, announced by Bukele in June and adopted by lawmakers shortly thereafter. , implies that businesses must accept bitcoin payments if they have the technology. Citizens are not required to use the asset but are encouraged to do so: those who sign up to use the government's official crypto wallet, Chivo, are rewarded with $ 30 in bitcoin. Chivo has had technical problems since bitcoin became legal tender in the country.

Bitcoin Dips Below $44,000 Over Concerns About Evergrande

Fear of contagion is spreading on crypto exchanges.

On Monday morning, the potential default of the world’s most-valuable real estate developer on $300 billion of debt sent Bitcoin and other cryptocurrencies sliding, renewing panic about how the collapse of one company could wield far-reaching effects on the Chinese and global economy.

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Bitcoin slumped to $43,442 on Monday, dipping 8.11%, as discouraging news about the Chinese real estate company Evergrande set off a panicked selling spree among traders. In the past day alone, the cryptocurrency dropped to as low as $42,527 while Ethereum dipped 9.94% to $3,012.

The deepening debt crisis plaguing the company is linked to its inability to pay interest payments on loans due Monday, on top of $84 million of interest payments on company bonds scheduled for this week. On Sunday, the world’s most indebted company announced it was repaying some investors with real estate instead.

“These concerns around what’s going on with Evergrande and China and a possible default there are having spillover effects into the European markets,” Mike Bell, a strategist at JPMorgan Asset Management in the U.K. told the New York Times.

“Could you get more volatility over the next month or two? Yes, that’s certainly possible,” Bell said. It’s likely, for example, that Evergrande’s expanding debt could impact other industries and continue roiling the markets in the coming weeks.

In response to the news, the Dow Jones Industrial Average futures decreased 1.83% or 629 points, while S&P 500 futures dipped 1.67% and Nasdaq’s slid 1.66%. In Asia, too, Evergrande's shares dropped by over 10% on Hong Kong's Hang Seng Index, renewing concerns about the spread of panic and contagion, as the Asian index slumped to its lowest point in almost a year, dipping by three percent.