Bitcoin skyrockets in advance of a significant economic shift in El Salvador

Bitcoin has soared to new heights in the run-up to a controversial cryptocurrency decision by a single country. However, this is not universally true.

Bitcoin's price has risen sharply in the run-up to El Salvador's decision to convert it to legal cash.

The digital currency surpassed the $51,000 barrier over the weekend.

At the time of press, CoinMarketCap reported that the world's most valuable cryptocurrency was trading at $US51,788.90 per coin.

That puts bitcoin close to its all-time high of $US63,314 set on April 13.

Bitcoin was last trading near $51,000 in mid-May.

On July 18, it plummeted to $US31,796, but has gradually increased over the subsequent two months.

The coin gained 5.4 percent last week and is now up 26.3 percent year to date.

Its price increase has been attributed to a variety of factors, including El Salvador's involvement and Facebook's endorsement.

El Salvador, the world's first country to adopt bitcoin as legal cash, will do so on Tuesday.

This means that if a customer wishes to make a payment in bitcoin, merchants will be forced to accept it.

President Nayib Bukele of El Salvador is a great bitcoin enthusiast. At the very least, he has a pair of laser eyes on his Twitter profile, indicating he is optimistic on cryptocurrency.

El Salvador decided in June to become the world's first country to legalise bitcoin as a form of currency.

Politicians voted in favour of establishing a legislation allowing for the use of bitcoin in everyday life with 62 of 84 available votes.

The bill will allow for the use of the notoriously volatile digital currency in a variety of everyday transactions, from property purchases to tax contributions.

On September 7, the law will take effect.

According to some, this will increase bitcoin adoption.

To entice individuals to join the Bitcoin revolution, El Salvador's government has offered $30 in free bitcoins to anyone who registers up for the country's national digital wallet, Chivo.

And, even more radical, according to Fast Company, foreigners who invest three bitcoins in the country – which is presently worth $US150,000 – will be awarded residency.

Not everyone, however, agrees with the decision.

The International Monetary Fund (IMF) has expressed concern over the coin's volatility, warning that it could destabilise El Salvador's economy.

Citizens opposed the change over the weekend, citing economic concerns.

FACEBOOK ADOPTS CRYPTOCURRENCY

To add to the excitement surrounding bitcoin and cryptocurrency in general, Facebook has entered the industry, further bolstering the market.

Last week, Bloomberg reported that Facebook executive David Marcus was developing its own digital wallet to support non-fungible token (NFT) transactions.

While this has no effect on bitcoin directly, it does contribute to the cryptocurrency frenzy.

Ethereum, bitcoin's chief competitor, does indeed use NFTs, and the announcement sent its price soaring.

It shot up to nearly $US4000 over the weekend.

The second-most valued cryptocurrency was trading at $US3,926.63 per coin at the time of press.

Facebook has made a significant investment in the cryptocurrency market by developing its own token, dubbed "diem."

Diem and the digital wallet will be launched together to increase use.

When Facebook initially unveiled its plans for the token, it faced regulatory opposition. Diem's developers have now spun off as an independent company, while Facebook continues to invest extensively in it.

However, the date of the coin's or wallet's introduction is unknown at this time.

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