Bitcoin tumbles to 52-week low; El Salvador minister unperturbed

moneycontrol.com:

Prices of Bitcoin, the world’s largest cryptocurrency by market capitalisation, briefly slipped below $21,000, its 52-week low.

The finance minister of El Salvador, the first country to adopt Bitcoin as legal tender, said he can only “smile” when told about the risks associated with the digital currency.

BTC fell to a low of $20,950 early Tuesday and quickly recovered to about $22,200, a decline of about 7 percent, according to data from CoinMarketCap, a price-tracking website for crypto assets.

With its current market capitalisation of about $430 billion, BTC is trading 66 percent lower than its all-time high price of $68,789 in November last year.

Investors are selling digital currencies on expectations the US Federal Reserve may increase interest rates sharply later this week after inflation in the US accelerated to a 40-year high.

El Salvadorian finance minister Alejandro Zelaya downplayed concerns about falling BTC prices.

“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,” Zelaya said at a press conference.

Zelaya cited an earlier estimate from Deutsche Welles that the country's BTC portfolio had lost some $40 million in value.

“Forty million dollars does not even represent 0.5 percent of our national general budget,” he said.

El Salvador has purchased 2,301 BTC since last September, when it became the first country to adopt the cryptocurrency as legal tender.