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The crypto crash on September 7:
Why did it happen?
The cryptocurrency is a trade that is always positioned in a variability of its price, based on the action that generates any product, the growth or fall, both financial and popularity. And this factor is: supply and demand.
It is a bit irrational to say that they have practically the same power of global influence. But it is not only these two big ones in the market that have generated a drop or rise if we talk about cryptocurrencies. A short time ago, an unexpected market made its way and generated a riot in free fall.
The government of El Salvador, granted bitcoin to be the cryptocurrency or cryptoactive of the country. It practically gave its citizens the ability to pay for any service in the country, in bitcoins.
But why did most cryptocurrencies fall and not just Bitcoin?
I have to clarify that bitcoin is the first virtual currency, the one that created the market of this digital exchange used today as a very large financial medium, and that when it is lowered from its previous percentage of value, the other cryptos will have as consequently, a rebound.
So, in clearer words, this decision by the Salvadoran government turned Bitcoin into an epicenter of an economic earthquake, taking the systems of other virtual currencies, which are below it on the list, ahead of it, shaken as aftershocks of the disaster.
The crypto assets that follow bitcoin according to market capitalization are: Ethereum, Cardano, Tether, Binance Coin, XRP, Polkadot, Dogcoin and USD Coin, in the same order respectively.
Let's talk about numbers
The capitalization value presented (or in fact, still does), one of the greatest difficulties since its creation and placing on the market ; give the front to be a legal tender in a Latin American country.
El Salvador is the first country in the world to adopt it as legal tender. And this did not generate a rise as would be suspected. It fell by 13.8% of its previous value, only on the first day when it is already palpable, as the official currency of El Salvador.
In New York, bitcoin fell to a value of $ 43,050, that represented a 10% decline in just one hour. This is saying a lot, since the virtual currency is a question, it had already surpassed the incredible level of USD $ 50,000.
On the same September 7, it again made several totally uncontrolled volatile turns, at one point it was also listed at USD $ 45,700.
And this is not all, the same collapse of bitcoin, caused the combined value of all currencies to be located at 2.1 trillion dollars, on the "Coingecko" platform, which has almost 9,300 cryptocurrencies within them.
From September 7 to this moment, the most expensive and influential virtual currency, has not been able to recover. It is still constantly rising and falling, at small costs.
Why did the action taken by El Salvador cause disasters in cryptocurrencies?
The idea of the president of El Salvador, is not enough to say, that it is an action considered controversial. It was not expected at all that the first territory to have a virtual currency of free use would be this one in particular.
Although since 2017, Nayib Bukele, president of El Salvador, had raised his ideas about bitcoin freely, it was considered only simple, very long-term intentions that, in reality, were thought to remain only in words.
Emphasizing, in the same way, that until recently it was also classified that way. Its repercussion was not even close to something that reverberated around the world at the time of proclaiming the Salvadoran law, but now it is.
The demand was so great, that first business day for the law of the use of bitcoin, that at that moment, the very Salvadoran system created to use the virtual currency, collapsed. The people who later granted problems to download it on their mobile phone, it was for that reason.
That, and the acquisition or purchase of 400 bitcoins by the government led by Bukele, so that the operation of its project to improve the Salvadoran purchasing power, for economic improvement, is shown as the reasons why the Salvadoran government has caused a volatility that persists in remaining in the digital currency or cryptocurrency market.