Thanks to El Salvador President Naib Bukele for 2 million new crypto traders raised in 60 days.
Salvadorans, who a couple of months ago did not hear such a word bitcoin, very quickly retrained from ordinary users of Chivo wallets, having to pay for purchases with bitcoin to experienced holders.
It took only three weeks for 2.5 million Salvadorans to assess the investment opportunities of bitcoin and began to use the state-developed bitcoin wallet not for buying essential goods, but as bank deposits with high returns. The flow of funds to buy bitcoin is 4 times higher than the sale of bitcoin on the state-owned Chivo.
However, three more weeks have passed and most of the Salvadorans have risen two steps in their understanding of the crypto market at once. They realized that it was possible to make money on the difference in rates and came up with a win-win way to make money on arbitrage.
The built-in state wallet freeze funds when buying or selling bitcoin for 1 minute was provided so that in case of a bad mobile communications, when a deal could not be made instantly, the user could be sure that when buying or selling bitcoin, that the price would not fly too far.
It was this vulnerability that they learned to use (https: // www.rbc.ru/crypto/news/616e9adb9a7947570f3f8155) Salvadorans. They used the freezing of the value of the first cryptocurrency for one minute, which occurs during the exchange, in order to make money on the difference in rates through arbitrage. In a minute, users managed to compare the price of bitcoin on crypto-exchanges.
If the value of bitcoin on the exchanges rises, users buy the asset in Chivo, using the fact that it is blocked. When the price of an asset on the exchanges decreases, the user is sold it at the value fixed by the application.
The developers of the wallet were forced to turn off the display of the bitcoin rate during the transaction. They said in their Twitter:
“This forces us to limit the visibility of the frozen rate while we move on to instant (and no longer frozen) convertibility. Thus, users can make transactions, but with an instant update of the real exchange rate. ”
This is what Bitcoin can do with an inexperienced, poorly educated and not very wealthy population in just 2 months. From a complete misunderstanding of what cryptocurrencies and bitcoin are, to a vicious and seasoned arbitrage trader.
It's scary to think what else the inventive Salvadorans will come up with in the next couple of months. We are waiting for underground crypto funds and ETF platforms. In a year, most of the world's centralized exchanges will refuse registration to Salvadorans. Otherwise they will shake the market.