Bitcoin investors gung-ho despite Chinese crackdown as El Salvador accepts digital coin as legal tender

Bitcoin investors gung-ho despite Chinese crackdown as El Salvador accepts digital coin as legal tender

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Bitcoin, the world’s largest cryptocurrency, rallied 13 percent Thursday after El Salvador, a South American country, voted in supermajority to adopt the digital coin as a legal tender. Bitcoin supporters welcomed the news by pushing the coin closer to $37,000-level.

At 9:12 am on Thursday, Bitcoin was trading at $37,176, nearly 13 percent high, according to data from CoinDesk. The coin then lost a bit of steam and dropped to $36,735 at the time of writing.

On Wednesday, Salvadoran Congress passed the bill to accept Bitcoin as a legal currency. The bill will become law in three months.

However, bitcoin traders appear to be ignoring the dismal news from China. The Asian country is tightening its restrictions on bitcoin mining and trading. It recently ordered the arrest of 1,000 people for alleged cryptocurrency laundering. It also ordered a shutdown of the mining facilities in Qinghai province and banned several blockchain keywords.

In fact, Chinese exchanges are witnessing a massive outflow of Bitcoin, CoinDesk reported, with the outflow being the highest in 2021. Experts say investors are buying and scooping Bitcoin to off-trading venue wallets.

Rather, investors remained focused on Bitcoin getting accepted as a legal tender, albeit in a small South American nation, as its backers have long seen the crypto as a viable alternative to fiat currencies.

El Salvador will also continue using the US dollar as a legal tender. Salvadoran President Neyib Bukele on Wednesday touted the use of Bitcoin for its potential to bring financial inclusion, investment, tourism, innovation, and development to the country.

The country has struck a deal with a digital wallet company Strike to build the financial infrastructure using bitcoin technology.

In the United States, on the other hand, the lawmakers presented one of the sharpest criticisms of bitcoin, CoinDesk reported, while touting the use of central bank digital currency (CBDT).

“If you want to send money to somebody else, digital currency can be easier and faster,” Sen Elizabeth Warren said. “But in order for those advantages to be realised, the digital version needs to be secure, stable, and accepted everywhere,” she added.



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