Yesterday, Bitcoin recorded the largest increase in the last two weeks. Specifically, up to $ 31,000.
Bitcoin has reached this value in the context in which the relaxation of the restrictions imposed by China to limit the spread of Covid-19 has aroused the appetite of investors for riskier assets. The cryptocurrency rose up 5.8% to $ 30,858.53.
Ether and smaller cryptocurrencies such as Avalanche, which were in decline last week, also rose on Monday. Thus, Ether rose to 6.6% on Monday, while Avalanche and Solana rose by 9% and 6%, respectively.
How Bitcoin has recovered
Moreover, cryptocurrencies also restored their tendency to trade in tandem with equities, after falling on Friday, even though the S&P 500 reached a weekly advance of 6.6%. This has raised concerns that investors will continue to get rid of digital currencies even amid a return to demand for other risky assets.
As a reference, Bitcoin fell in the head last week and had effects on El Salvador’s reserves. The losses are equivalent to the next expected payment of the nation to the bondholders. The government of El Salvador was the first government in the world to make Bitcoin a legal means of payment in September last year. In this regard, President Nayib Bukele has invested about $ 105 million in the purchase of BTC. The price of digital currency has fallen by 45% since the first acquisition, and this has reduced the value of the holding by 66 million dollars, writes LeMonde.
As a result, there were losses of about $ 40 million. This is slightly more than the country’s next $ 38.25 million external debt payment, which will have to be paid in June.
Despite this, price volatility does not seem to discourage governments too much. For example, the British Treasury last month announced plans for stablecoins to be recognized as a valid form of payment. So while there may be a lot to learn from the El Salvador experiment, that doesn’t mean it’s the end of states’ interest in cryptocurrencies and their increasing use in making regular payments.