Bitcoin’s spectacular fall from grace has also dragged its rivals into the red zone in another blow to the cryptocurrency market.
Bitcoin’s spectacular fall from grace has also dragged its rivals into the red zone in another blow to cryptocurrency.
Last week, an estimated $US400 billion ($A543 billion) vanished from the crypto market after bitcoin crashed by more than 10 per cent in a single day.
The volatile cryptocurrency dropped from $US50,257 ($A68,211) to $US43,351 ($A58,838).
It’s stayed below the critical $US50,000 ($A68,000) mark ever since.
At time of writing, bitcoin had gained a bit, trading at $US45,055.31 ($A61,151.32).
The massive price drop came as El Salvador became the first country to introduce bitcoin as legal tender.
Although the country’s radical move at first buoyed the market, it soon sent bitcoin plummeting after the country had to pause digital wallets because of a glitch.
Like dominoes, other cryptocurrency started to topple.
Ethereum, cardano and binance recorded even sharper falls than their bitcoin counterparts.
The three digital coins plunged between 13 per cent and 18 per cent last week.
At time of writing, etheruem was trading at $US3288.95 ($A4463.93), down from its all-time high of $US4196.63 ($A5695.88) in May, according to cryptocurrency aggregator CoinMarketCap.
A single Cardano coin can now be bought for $US2.42 ($A3.28) down from its highest ever price of $US2.58 ($A3.50) late last month.
As for binance, the coin is now worth $US399.46 ($A542.17) despite its all-time high in May of $690.90 ($A937.72).
In all, $400 billion ($A543 billion) was wiped off the charts, and the world’s cryptocurrencies hit this year’s rock bottom of a market cap $1.9 trillion ($A2.58 trillion) on Tuesday, according to Forbes.
However, despite the shaky start to El Salvador’s bid as a crypto nation, the country’s leader decided to make the most of the coin crashes.
El Salvador President Nayib Bukele announced the country took advantage of the “dip” by buying up an additional 150 bitcoins.
Mr Bukele’s holdings have now gone up to 550 coins – worth a total of about $US25 million ($A34 million).
First country to make bitcoin legal tender
In June, El Salvador voted to become the first nation in the world to adopt bitcoin as legal tender.
With 62 out of 84 possible votes, politicians voted in favour of the move to create a law to adopt bitcoin for everyday use.
The bill allows the famously volatile digital currency to be used for many aspects of daily life, from property purchases to tax contributions.
The law came into effect last Tuesday, on September 7.
To encourage citizens to jump on the bandwagon, the El Salvador government even handed out $30 in free bitcoins to anyone who signed up for its national digital wallet, known as Chivo.
Foreigners who invest three bitcoins into the country – currently a whopping $US150,000 ($A200,000) – will be granted residency, according to Fast Company.
Bitcoin investors can also avoid paying tax, according to The Coin Telegraph.
However, not everyone is a fan of the move.
The International Monetary Fund (IMF) is worried about the coin’s volatility and has warned that it could destabilise the El Salvador economy.