El Salvador Disables Bitcoin Price On Chivo App To Stop Scalpers
October 18 2021 - 6:46PM
NEWSBTC
Bitcoin traders have found a way to use the recently launch Chivo
App, the countries own BTC wallet, by El Salvador’s government to
make a profit. As part of their BTC Law, this app operates with the
second layer payment solution lightning network. Related Reading
| Bitcoin Price Smashes Record For Highest Weekly Candle Close
Ever Via its official Twitter handle Chivo Wallet announced that
Salvadorans will be unable to track the price of BTC on the app.
According to the report presented by the team behind the app, some
users have been using it to do “scalping”. A type of short-term
trading modality, scalping is performed by an operator to take
advantage of an asset’s price fluctuations in low timeframes. In
previous versions, the app allowed users to “freeze” the price of
Bitcoin giving traders an edge to perform this practice by
comparing it to exchange rates. The Chivo Wallet allows users to
move BTC via the lightning network to other Chivo users or external
BTC wallets. Thus, traders can make a profit by scalping the app’s
BTC price. The team behind the app clarified the following on the
reasons for the decision: The “scalping” performed consisted of
taking advantage of Chivo keeping the rate frozen for 1 minute and
taking advantage of that minute to compare the rate with other
exchanges and see if the Bitcoin price went down or up. In the
future, the price of Bitcoin will have limited visibility to
prevent these operators from accessing what the team called “an
unlimited source of money”. The app will not ban trading itself,
just the capacity to “freeze” BTC’s price on the platform. Related
Reading | Number Of Bitcoin Whales On The Rise As BTC Chases
New All-Time High Salvadorans Will Have New Functionalities On
Their Bitcoin Wallet On the contrary, the team behind Chivo claimed
that is working on adding a trading feature for the wallet. In the
future, the app will let these operators trade with BTC with any
modality, but with the asset’s price display in real-time. However,
Salvadorans can already profit from BTC exposure. Since the wallet
was launched, when the government gave citizens a $30 bonus in the
cryptocurrency, Bitcoin has increased its value by over 30%. Upon
launch, El Salvador and its president Nayib Bukele surely
underestimated or failed to consider crypto traders’ capacity to
leverage a situation for their benefit. It remains to be seen
whether disabling BTC’s price from the app will effectively stop
scalpers. Related Reading | TA: Bitcoin Gearing For Lift-Off
to $65K: Rally Isn’t Over Yet At the time of writing, BTC trades at
$$61,980 with a 1% profit in the daily and a 13.3% profit in the
weekly charts, respectively. BTC’s price remains in a rally and
it’s near $64,500, its all-time high.
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