Bitcoin is once again on the rise, boosted by El Salvador’s announcement on Wednesday that the cryptocurrency will be recognised as legal tender.

The world’s largest cryptocurrency by market capitalisation, priced at $36,360 at the time of writing, has risen around 17% since the so-called flash crash on Tuesday.

Following El Salvador’s ground-breaking announcement, other countries in South America are also hinting that they may follow suit.

Bitcoin’s rally has had a ripple effect across the entire cryptocurrency space.

Indeed, other leading digital currencies including Ethereum, Dogecoin and Cardano, all reported gains on Wednesday.

Charlie Silver, CEO of Permission.io said of El Salvador’s move: “With El Salvador's recent announcement, this is definitely a monumental moment, and it will continue to validate Bitcoin and other cryptocurrencies and further stabilize prices after a volatile couple of weeks.”

In addition, Nick Mancini, research analyst at crypto sentiment data provider Trade The Chain said: “We agree that both inflation concerns and the El Salvador Bitcoin adoption news were a great one-two punch of positive sentiment for Bitcoin,” he stated.

“Traders’ outlook on Bitcoin started picking up around 1am ET, which was when the El Salvadorian news broke.

“Bitcoin price and sentiment are currently spiking in line with each other, and we expect that trend to continue,” he added.

deVere CEO and founder Nigel Green echoed the sentiment: “El Salvador has made history and become a true pioneer of the digital age.

“Where El Salvador has led, we can expect other developing countries to follow.

“This is because low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation.”