El Salvador is now learning why the rest of the world won’t instantly use Bitcoin as a currency for daily transactions.
The crypto market ran strong in the past eight weeks. Until El Salvador’s government disconnected the Chivo bitcoin wallet app to sort out technical glitches, and then bam!
Within minutes, bitcoin prices plunged as much as 17% to $43,050 — its lowest level in nearly a month. Other cryptocurrency assets and related stocks plummeted as well.
Billionaire Mike Novogratz, a long-time crypto bull, says Bitcoin investors got “a little too excited”, and for a good reason. No Bitcoin investor wants to miss the next big cryptocurrency trend on the Internet today.
Large institutions riding the crypto wagon
To instill faith, perhaps on Bitcoin prices soaring, Mike pointed out that large institutions are now onboarding the crypto wagon.
Case in point: Visa Inc. recently bought a digital avatar worth $150,000, a form of NFT (or non-fungible token).
Last week, Amazon Inc. posted a job listing for “digital currency and blockchain product lead”. Walmart Inc. is also looking to hire a cryptocurrency expert.
Individual investors also showed interest in buying cryptocurrency and other digital assets, and that’s a good reason for Bitcoin prices to soar in the future.
After all, the more the buyers, the higher the prices.
So, according to Mike Novogratz, the new Bitcoin price dip is nothing to worry about. Think of it as “little air being popped out of the balloon”, he says.
Will the shaky launch of El Salvador’s Chivo affect Bitcoin adoption?
Mike says technical glitches that plagued the Chivo Bitcoin wallet app rollout are inevitable. And that the country’s government will smoother the system issues over time.
He’s confident that if we revisit this story in the next three to six months, El Salvador’s cryptosystem will have changed. For the better.
He said doing things on a massive scale as El Salvador did is difficult. So, it’s only fair that the world gives the Latin American nation the benefit of the doubt to get it right.
El Salvador’s government used BitGo — a cryptocurrency start-up owned by Mike Novogratz — to roll out the infrastructure and security of the Bitcoin wallet app, Chivo.
Mike’s company, Galaxy Digital, bought BitGo in May for approximately $1.2 billion.
For now, no one completely understands the crypto market. But in the long run, Bitcoin prices will most likely soar. Thanks to large institutions trusting Bitcoin as a store of value.
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