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June 10, 2021 @ 17:14 +03:00
The cryptocurrency market received unexpected but welcomed support from the government of El Salvador, which approved Bitcoin as an official means of payment. Although this is a precedent in world practice, this decision was made by a very small country with a small economy. The official currencies of the country are now the U.S. dollar and Bitcoin. This is very symbolic and an epic progression for crypto enthusiasts.
Of course, Bitcoin is not adopted by one of the leading economies like Sweden or Britain; nevertheless, authorities of the major central banks may take this event very seriously, though they will not show their concern publicly. Yesterday we saw a precedent where the competition with national currencies became tangible. And Bitcoin’s reaction was very fast: BTC has added more than 10% in the past 24 hours, encouraging retail investors to buy.
On the technical analysis side, Bitcoin received unusually timely support as it once again tested its 200-day moving average. This local victory may potentially cool the bears, who have been persistently pushing down Bitcoin for the last two months. But it is too early to talk about a victory for the bulls: BTCUSD needs to consolidate above $40K and develop growth from this level to finally break away from the bearish trend.
As a pioneer in introducing cryptocurrency as official means of payment, El Salvador may well be intent on becoming a cryptocurrency offshore at a time when tax havens are under increasing pressure. In fact, tax havens are becoming a thing of the past, and the corporate tax rate has trended toward equalization on a global level.
Smaller third-world countries are preparing to take this chance to attract quiet capital and crypto-millionaires who risked being exposed because of the widespread tax transparency. If this is the factor at play, Bitcoin is poised for impressive long-term growth.
The FxPro Analyst Team