What happened
The cryptocurrency crash that began when El Salvador made Bitcoin a legal currency on Tuesday is continuing to roil markets on Wednesday.
As of 9:35 a.m. EDT here's how prices look for several of the biggest names in cryptocurrency:
- Bitcoin (BTC 3.17%) is down 8.9% over the last 24 hours, according to data from Coindesk.
- Ethereum (ETH 5.38%) is off a bit more -- down 9.2%.
- Dogecoin (DOGE 4.12%) has tumbled 13.3%.
- XRP (XRP 3.76%), the token closely associated with Ripple, is suffering worst of all, declining 15.8%.
Image source: Getty Images.
So what
Most market pundits continue to blame El Salvador for the crash, with Reuters reporting this morning, for example, that the Latin American nation "ran into snags" rolling out its Chivo digital wallet. Users reportedly had trouble registering with the app, and so the government "unplugged it ... in order to connect to more servers and increase capacity."
Worryingly, El Salvador's troubles may not be over yet, either. In a tweet yesterday, Salvadoran president Nayib Bukele warned "not everything will be achieved in a day, or in a month."
Now what
Nor was El Salvador cryptocurrency investors' only problem yesterday. Multiple cryptocurrency exchanges -- Coinbase Global, Kraken, and Gemini among them, reports Reuters -- suffered delays, errors, and issues that prevented transactions from going through correctly yesterday, which won't have done anything good for investors' confidence in digital currencies.
At the same time, The Wall Street Journal observes that Bitcoin in particular has enjoyed a 70% run-up in price since late July, which "could have prompted traders to book profits" once things started going haywire on Tuesday. In other words, if investors were looking for an excuse to take chips off the table, and start counting profits until the turbulence passed, Tuesday gave them any number of excuses to do so. Furthermore, today -- even after yesterday's sell-off -- Bitcoin's price is still up a staggering 56% from its July 20 nadir, and up 360% from one year ago.
That's a whole lot of profit in search of a reason to sell. I wouldn't be a bit surprised if investors keep looking for excuses to sell today.
