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El Salvador Adopts Bitcoin as Legal Tender, Boris Johnson Announces Tax Hike & Chinese Officials Drop Lawsuit

Bitcoin prices plummet on El Salvador announcement

Despite U.S. markets reopening after the Labor Day weekend, it was Bitcoin which once again stole the headlines.

Prices of the world’s largest cryptocurrency fell by as much as 10%, as El Salvador became the first country to announce it would be adopting it as a legal tender.

💡Why are people skeptical about Bitcoin?
Bitcoin, many critics have said, is too volatile to be used by Salvadorans working overseas to send back to their families. El Salvador President Nayib Bukele argued that by adopting the cryptocurrency, Salvadorans will save money on remittance fees — collectively about $400 million a year

Many believe that recent rallies within the crypto space came in anticipation of today’s announcement, however as full details were not released, many saw it as a time to cash out from the recent run.

BTCUSD hit an intraday low of $43,917 on the news, which is its lowest level in the last 4-weeks.

Ethereum also traded at a low of $2,963.48.

FTSE 100 falls as Boris announces tax hike

The FTSE 100 fell in today’s trading session, as British Prime Minister Boris Johnson announced a new tax levy.

Boris confirmed that the new healthcare tax will be introduced to help pay for upgrades to the National Health Service.

Under the plan, the government will increase national insurance contributions by 1.25%, beginning from April 2022.

Speaking after the announcement, the Prime Minister stated that, “It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it”.

Many in the government opposed the Prime Minister’s decision, however as he pushed through, his choices created some tensions within the cabinet. 

The FTSE 100 fell by 0.53% in today’s session.

Alibaba stocks rises as officials drop lawsuit

Shares in Alibaba were trading higher on Tuesday, as government officials confirmed that they were dropping a lawsuit against a former employee of the firm.

The employee, who was a former manager at the company, was accused of sexually assaulting a colleague during a business trip.

💡Alibaba Lawsuit
Early in August an Alibaba manager was fired after an employee accused him of sexual assault. Two other employees, including a senior executive resigned shortly after

Chinese prosecutors came to the conclusion that the former employee had committed forcible indecency but not a crime.

Shares in $BABA were up by 1.19% to close on Tuesday, which came as data from China also showed imports had grown by 33% from the same period last August.

The Shanghai Composite was up 1.51% on the news.

Quote of the day – “I believe in analysis and not forecasting.”

– Nicolas Darvas

Eliman Dambell

Senior Market Analyst