Bitcoin Falls 20 Percent as El Salvador Buys 150 Coins in Dip

The value of Bitcoin fell by more than 20 percent on Saturday amid general instability in world financial markets that may be partly due to the new Omicron variant of COVID-19.

Bitcoin, the largest cryptocurrency, fell as low as $41,967.50 before making some gains following the decline. That represents a total loss of more than 20 percent, but the value recovered to a degree and was down around 11 percent on Saturday morning.

Ether, the second largest cryptocurrency, also suffered losses on Saturday, dropping by as much as 17.4 percent before recovering, with its value down about 10 percent.

Almost a billion dollars worth of cryptocurrency was sold off on Saturday and some took advantage of the declining price.

The nation of El Salvador purchased bitcoin as the price dipped, according to the country's president, Nayib Bukele.

Bukele wrote on Twitter on Saturday morning: "El Salvador just bought the dip!"

"150 coins at an average USD price of ~$48,670," the president said, adding celebratory emoji and a Christmas tree.

Bukele later added in another tweet: "Missed the f***ing bottom by 7 minutes."

El Salvador adopted bitcoin as legal tender in September and the digital currency's value is also up by more than 60 percent this year despite the sharp decline on Saturday.

The decline came as financial markets are hit by volatility that is likely due to a number of factors, including the Omicron variant of COVID-19 and the actions of central banks amid concerns about inflation.

The possibility of economies shutting down again due to the new variant also appears to have affected markets, with the stock market down four percent from November.

President Joe Biden has ruled out lockdowns in response to the Omicron variant and laid out his administration's winter COVID plan on Thursday, emphasizing testing and vaccination.

However, several European countries have reintroduced lockdown measures, with Germany announcing on Friday that major restrictions would be placed on unvaccinated people. Germany is the largest economy in the European Union (E.U.)

A slowdown in U.S. job growth may also have contributed to the situation, with benchmark U.S. bond yields falling on Friday on news that the country added just 210,000 jobs in November, a disappointing figure that was around half of what was expected by economists.

Senior executives from eight major cryptocurrency firms are set to testify before the House of Representatives' Financial Services Committee on December 8 - the first time leaders in the cryptocurrency market will appear before U.S. lawmakers.

Some in Congress have called for greater regulation of the cryptocurrency sector.

Senator Elizabeth Warren (D-MA) told Securities and Exchange Commission (SEC) Chair Gary Gensler at a hearing in September that his agency needed to do more on the issue.

"Regulators need to step up to address crypto's regulatory gaps and ensure that we're actually building the inclusive financial system that we need. And Chair Gensler, I expect you and the SEC to take a leading role in getting this done," Warren said.