Crypto crash & Murphy’s law: The recent dip shows correlation

Highlights

• Bitcoin’s flash crash saw the crypto register a loss by 15%, as per CoinMarketCap.
• The Bitcoin, which was trading at $51000, suddenly crashed to a month low of $42,000.
• The entire Cryptocurrency market on Wednesday was down by 13.31%.

Soon after El Salvador made Bitcoin its legal tender, the cryptocurrency market had once again reminded us of the Murphy’s law, which states that ‘anything that can go wrong will go wrong’. That’s what happened on Tuesday and its aftereffects is still flowing into Wednesday’s trading session. The market has suffered a flash crash with the prices of leading cryptocurrencies like Bitcoin, Cardano, Ethereum all suffering from significant losses. The flash crash was such dramatic that Bitcoin, which was trading at $51000, suddenly crashed to a month low of $42, 000 – registering a 15% loss as per CoinMarketCap.

This isn’t surprising as many leading world bodies such as IMF, World Bank have been questioning El Salvador’s experiment raising alarms about economic and legal risks threatening the country. However, few sceptics also believe in Murphy’s law theory. Tuesday was a historic day for the cryptocurrencies after El Salvador became the first country in the world to adopt bitcoin as a legal tender. El Salvadorian’s Bitcoin experiment promised the users lower commission costs for transactions. President Nayib Bukele also targeted Salvadorans to save on $400 million spent annually in commissions for remittances. Besides, the Central American country rolled out hundreds of bitcoin ATMs and a new cryptocurrency wallet, Chivo. which is powered by a digital wallet firm BitGo.

Crypto crash & Murphy’s law: Is there a correlation?

Chivo runs into trouble

However, after half an hour of its official launch, President Bukele tweeted that the Chivo app is facing some problem. There were complaints of many users not being able to download or receive the $30, which was promised to users who download the app. This led to Chivo team to temporarily hold its service due to the lack of its server capacity. It is still unclear if the Chivo team has been able to rectify the issues.

Impact on Cryptocurrencies

This glitch has had a severe impact on late Tuesday’s trading and has flowed into Wednesday’s sessions as well. Bitcoin has been able to marginally correct itself and is trading at $45,401.1 and it is still down by 13.72% from its previous high. Although the prices have dropped, there has been enough volume and that has been seeing green and is up by 61.97%, according to CoinMarketCap.

Ethereum too is down by 14.73% and is trading at $3,340.92. Altcoins such as Solano, which had surged by close to 200% past week, is seeing red and is trading at $165.17 and is down by 15.61%. In fact, majority of the investors are looking to make the most and dump BTC and ensure that they don’t suffer further loss. It has created a sense of panic amongst the investors and are dreading that it could further go down resulting in a crypto crash that we witnessed in May this year.

This recent pull back has, in fact, further strengthened the voice that El Salvador’s Bitcoin experiment is a failed one and it could turn out to be the one that could pull the market down along with it. The Murphy’s law couldn’t get a more synonymous example than this recent market crash.

Tightening the screws around merchants?

Well, the El Salvador government is now trying to save itself from an embarrassing situation and is trying to tighten the screw around the merchants. Javier Argueta, the legal counsel to the Presidential House of El Salvador, has now mandated the merchants to accept payment in Bitcoins only.

According to Argueta, all businesses in the country are obliged to make the transaction in Bitcoin and if they don’t comply to it, the businesses will be facing the consequences set by the Consumer Protection Law.

Conclusion

The El Salvador crypto experiment and the crypto crash has highlighted one thing that whatever could go wrong on a historic event has gone wrong, i.e, the cryptocurrency market and Murphy’s law are intertwined. The crypto market needs a strong motivation to push out of this low and the customer confidence needs to be set in before we see some sort of significant change in the market.

But for now, El Salvador Bitcoin experiment has become an embarrassing example of how things can go wrong if not properly tested at a vast scale. It is also a lesson for many countries like Panama, which too were interested in making Bitcoin a legal tender.