Bitcoin: El Salvador’s experiment does not warrant cross-cryptocurrency price rise

Early adopters of cryptocurrencies have clear incentives to promote mainstream acceptance. The more buyers you have, the higher the price.Therefore, crypto fans have hatched an online plan to strengthen Bitcoin as El Salvador. Legalize tokens For payment. It was logical. Knock-on rises in other cryptocurrency prices were not.

An 8% increase in Bitcoin over the last seven days means it’s now worth about $ 51,000. But according to CoinGecko’s data, which tracks over 9,000 coins, it’s not the biggest mover. Ethereum, the world’s second largest cryptocurrency, has jumped 16% in the past week. Solana’s SOL tokens are up 69%.

There is no reasonable reason for these rallies. El Salvador is not expected to make other cryptocurrencies legal tender. Instead, jumps reflect a mix of low interest rates, blind beliefs, and a soup of better investor access.

Trading apps make it easy for retail investors to buy crypto. The initial public offering of Coinbase in April raised its profile and led to a surge in downloads.

The false world of non-fungible tokens (NFTs) has also boosted cryptography. These prove ownership of digital assets such as art, music, and even virtual pet rock. Many use the Ethereum network. Andreessen Horowitz-backed Solana has its own NFT Marketplace, Solanat.

However, this has nothing to do with the adoption of Bitcoin, which has attracted the attention of El Salvador. This diverts domestic attention from the failed economy of this poor Central American country, the first country to adopt Bitcoin as fiat currency. It also provides Bitcoin fans with a more hilarious news flow than the collapse of cryptocurrency value this spring.

The rise in prices means that the total market value of cryptocurrencies has reached about $ 2.4 trillion. It is rapidly approaching the $ 2.57 trillion past record set in May. Bitcoin’s share of the market is declining. It is now about 40%, down from 57% a year ago. Still, Bitcoin remains a powerful pioneer.

This can be a problem if Bitcoin’s latest rally relies on success in El Salvador. President Nayib Bukele says the country has bought 400 Bitcoins. This represents only 0.002 percent of the unpaid value. Local opposition is widespread, suggesting that coverage will be low. Wet squibs are more likely than the economic turmoil predicted by some critics.

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