Bitcoin (BTC) Crashes Under $22,000 Amid Crypto Market Rout, El Salvador Denies Any Risks
On Monday, June 13, the broader cryptocurrency market faced a brutal crash with the total market cap collapsing over $1 trillion for the first time in 18 months. The world’s largest crypto Bitcoin (BTC) faced a 20% drop in a single day with its price crashing under $22,000.
As of press time, Bitcoin is trading at $21,886 with a market cap of $417 billion. This year in 2022, the world’s largest cryptocurrency is down already by more than 50%. The correction in the altcoin space has been even deeper.
The world’s second-largest cryptocurrency Ethereum (ETH) has faced brutal crash with its price slipping under $1,200. One of the reason behind Ethereum crash has been the de-pegging of staked ETH (stETH) from the actual ETH on the Celsius Network. This cryptocurrency lending and staking platform has been undergoing a major liquidity crisis as of now which has resulted into a cascade of liquidations across the broader crypto space.
All eyes are currently on El Salvador which has been buying Bitcoin as part of its Treasury over the last year. The Latin America country made Bitcoin a legal tender last year and since then it has accumulated 2,300 BTC as its reserves. However, with Bitcoin tanking all the way to $22,000, there have been serious concerns that El Salvador will be facing major financial issues.
However, El Salvador’s Finance Minister Alejandro Zelaya has dismissed any concerns of financial risks relating to the BTC price collapse. He said: “When they tell me that the fiscal risk for El Salvador because of Bitcoin is really high, the only thing I can do is smile. The fiscal risk is extremely minimal”.
As per reports, El Salvador might be facing losses to the tune of $40 million with its Bitcoin holdings. “Forty million dollars does not even represent 0.5 percent of our national general budget,” said Zelaya.
On the other hand, business intelligence firm MicroStrategy has faced 25% value erosion to the tune of $1 billion on its Bitcoin holdings. The company led by Michael Saylor holds close to 130,000 Bitcoins on its balance sheet with average holding price of $30,700. However, Taylor has said that the company is not going to sell a single Bitcoin and will only think about it if the BTC price crashes to 95% from the peak.