El Salvador may be the first to adopt bitcoin, but many are betting that it won’t be the last.

Several other countries in Latin America could soon follow suit, with politicians in Argentina, Brazil, Mexico, Panama and Paraguay all expressing an interest in the cryptocurrency.

There are numerous obvious benefits to formally recognising bitcoin as legal tender, such as slowing inflation, enticing crypto entrepreneurs, and increasing financial inclusion of those forgotten by the formal economy. But there are also some risks that come with it - not least incurring the wrath of the US.

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The price of bitcoin has just crossed back above the $35,000 mark, up nearly $5,000 since yesterday’s lows.

The cryptocurrency is still down by around 6 per cent, week-on-week, but it represents a solid bounce back from the flash crash that hit the whole market at the start of this week.

It’s also still a long way off the $64,000 price peak that bitcoin saw in mid April, but zooming even further out, it’s up by nearly 300 per cent year-on-year.

What does El Salvador’s landmark ruling actually mean for bitcoin, cryptocurrency, and the global financial system?

We’ve heard from Ross Middleton, chief financial officer of decentralised ethereum exchange DeversiFi to hear his thoughts on the implications of this milestone.

He says it may be easy to dismiss this ruling as not significant, given that the El Salvador GDP is only $27 billion, but the ruling could signal “a new step for bitcoin global adoption” and is “huge” for ordinary Salvadorians who may not have access to traditional financial services.

The president of El Salvador, Nayib Bukele, has shared the full text of the Bitcoin Law.

It states: “The purpose of this law is to regulate bitcoin as unrestricted legal tended with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out... Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.”

In a peculiar twist, this part of the law means that Tesla will be forced to accept bitcoin as a form of payment when selling cars in El Salvador - just over a month after rejecting the cryptocurrency.

This is big news for bitcoin. The congress of El Salvador has passed a law that will officially make the cryptocurrency legal tender in the country.

The Bitcoin Law is aimed at improving financial inclusion, while also enticing crypto entrepreneurs to the Central American country. Being classed as a currency means it won’t be subject to capital gains tax.

The decree will take effect in 90 days.

Bitcoin’s price bounced back 5 per cent on the positive news.

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His model foresaw bitcoin’s massive price gains and predicted a peak of $288,000 for this current cycle. While his model allows for price corrections, the scale of this current dip is proving a major test.

Right now, the market could be following similar patterns to the 2013 and 2017 bull runs - or it could be about to replicate the patterns seen in the subsequent “crypto winter” crashes.

If bitcoin falls any lower, or remains at this price for much longer, PlanB said it could be a “death cross” for the cryptocurrency.

In a poll of his half a million Twitter followers today, PlanB asked if bitcoin’s price would bounce back or cross this potential point of no return. The response favoured a bounce back, but not by much.

One commenter referred to it as the “moment of truth” for bitcoin.

It looks like the address holding the bitcoins seized by the FBI during the agency’s investigation into a ransomware attack on a gas pipeline in the US has been tracked down.

Antoine Le Calvez, the self-proclaimed “Indiana Jones of the cryptosphere”, used info from the warrant to find the bitcoin wallet holding the illegally gotten gains. It seems the hackers did not move them into cold storage, where they would have been safe, but instead left them on an exchange or custodial wallet based in the US that was subject to interference from law enforcement.

The $2.3 million seized by the Department of Justice has been attributed by some as the cause of the latest price crash, though it amounts to just 69 bitcoins - and is no reflection on the network’s overall strength or security.

Despite the sudden drop in the market, many bitcoin price analysts and crypto experts remain overwhelmingly positive about the cryptocurrency’s future.

Paolo Ardoino, the chief technology officer at the exchange Bitfinex, tells The Independent that he is “extremely bullish” about bitcoin in the long term.

Here’s what he had to say:

The latest crypto market crash is showing no signs of slowing down, with bitcoin falling by more than $1,000 over the last hour.

All other major cryptocurrencies have followed its lead, with Ethereum (ether), Binance Coin, Cardano (ada), dogecoin, Ripple (XRP), Polkadot, Uniswap and bitcoin cash all registering losses of between 10-25 per cent over the last 24 hours.

It means all of them are now also down when looking at their price charts on a week-by-week basis. (Only the stablecoins Tether and USD Coin, whose value is tied to that of the US dollar, have prevented the entire top half of the market from turning red.)

Online payments giant PayPal, which began supporting crypto payments earlier this year, has registered a new daily volume record in excess of $300 million.

The new peak surpasses the previous record seen in January this year, according to ItBit, the cryptocurrency firm that serves as the custodian for PayPal’s bitcoin funds.

Some analysts have speculated that this could be a bullish sign for the market, as it could suggest that investors are stocking up on bitcoin while the price is around half that of the $64,000 peak it saw in mid April.