Crypto market drifts sideways on announcement at Bitcoin Miami 2021 – Crypto Weekly Roundup, June 07, 2021

Will Bitcoin become legal tender in El Salvador?

Bitcoin has drifted sideways this week; caught between waves of volatility as bad news from China and tweets from Elon Musk rock the market back and forth.

Prices approached $40K on Friday, before Musk tweeted a broken heart emoji with the Bitcoin logo, triggering a 7% drop. Fears over his influence on the market were then calmed as he changed his profile picture to a laser-eyed Bitcoin anime figure, but the recovery was blocked by news that Chinese social media platform Weibo had suspended crypto influencer accounts.

In the end, Bitcoin finished the week flat, while Ethereum fared slightly better with 3% gains. Dogecoin ran ahead adding 16%, matched by IOTA which has released an update of the network’s ‘Tangle’ protocol.

This Week’s Highlights

  • El Salvador to make Bitcoin legal tender
  • China purges crypto social media

El Salvador to make Bitcoin legal tender

In what could be a giant leap forward for Bitcoin, El Salvador President Nayib Bukele has said he plans to introduce legislation that will make the country the first to adopt the cryptoasset as legal tender.

Bukele announced his intentions at the Bitcoin 2021 conference in Miami, claiming the measure will make it easier for Salvadorans living overseas to send money home. He also said that he has assembled a team of Bitcoin experts to help build a new financial ecosystem around the cryptoasset.

Despite the potentially monumental news, it didn’t move the market. This suggests traders could be waiting for further details to assess the impact.

China purges crypto influencers

After being battered and bruised by Elon’s tweets, Bitcoin’s attempted recovery was blocked by signs of a further crackdown on crypto in China.

Prices of all major cryptocurrencies fell on Saturday as it emerged that China’s Twitter equivalent Weibo had blocked several influencers and media outlets in a cleansing of crypto industry accounts.

With concerns about China weighing heavily on the market after the recent ban, the social media purge has only confirmed the government’s intentions — dealing another damaging blow to crypto market sentiment.

The week ahead

As prices of the major cryptocurrencies have now drifted sideways since the drop of mid-May, expectations are growing for a breakout that will signal the future trend.

Such a move could be catalysed this week by the bill to make Bitcoin legal tender in El Salvador. This piece of legislation is expected to pass in the next few days, but could attract criticism from the global community.

Elsewhere, global markets will be waiting with bated breath for US inflation data. Set to be released on Thursday, this could indicate how permanent rising prices are likely to be, and trigger volatility across crypto and stock markets.