Article written exclusively for Investing.com.
- Il is the national currency of El Salvador
- Coinbase (NASDAQ 🙂 meets the obstacle of regulatory bodies
- Another buying opportunity for the bulls; a moment “I told you so” for the bears
Bitcoin is the national currency of El Salvador
Ironically: Bitcoin collapsed on September 7, the day it became El Salvador’s official currency. The Central American nation became the first nation to adopt Bitcoin as a trading currency. El Salvador’s currency is very volatile and the government has decided to use cryptocurrency as a legal means to attract new investments and stabilize the economy.
El Salvadorians can download a “Chivo wallet, ”An application created by the government that will give away $ 30 in Bitcoin to promote its use. The IMF, the supranational institution that granted the emergency loan to El Salvador in 2020, expressed fears about the maneuver, citing economic, financial and legal problems.
El Salvador has titled “Bitcoin Day” on 7 September.
Some crypto advocates believe that El Salvador will only be the first of many countries to adopt digital tokens. Brazil and Argentina are candidates since and have been under siege for years. El Salvador is a test case, but the September 7 price action was not what the government expected: the price plummeted.
- Coinbase encounters the obstacle of regulatory bodies
Still on the subject of cryptocurrencies, last week, the SEC sent a notice to Coinbase. COIN is the leading cryptocurrency exchange that listed its shares on April 14, 2021 – the day Bitcoin futures hit an all-time high of $ 65,520 per token.
The pre-listing reference price for the stock was $ 250, but the stock soared to a high of $ 429.54 in a speculative frenzy on its first day of trading. Since then, COIN has fallen to a low of $ 208 on May 17. The stock settled just below its reference price of $ 248.32 per share on Friday September 10th.
Last week’s notice from the US Security and Exchange Commission informed COIN that the regulatory agency intended to take the company to court to prevent it from launching its new Lend product. Coinbase intends to allow customers who hold cryptocurrency tokens to lend them on the market to borrowers who will pay a fee, creating a yield.
The SEC move is the first regulatory shot fired against the asset class and may have caused prices to drop over the past week. Regulators and lawmakers are trying to get their hands around the burgeoning cryptocurrency asset class to “protect market participants.”
However, the underlying concern could be the control of the money supply. Cryptocurrencies are a libertarian effort to return the money management from governments, central banks, monetary authorities, and supranational financial institutions back to individuals. Since money is the root of power, many government officials worldwide view cryptocurrencies as a threat to their power.
However, the underlying concern may be the control of the money supply. Cryptocurrencies are a libertarian effort to return the management of money from governments, central banks, monetary authorities and supranational financial institutions to individuals. Since money is the root of power, many government officials around the world see cryptocurrencies as a threat to their power.
Another buying opportunity for the bulls; a moment “I told you so” for the bears
The bulls undoubtedly believe that the most recent price correction in Bitcoin, Ethereum and a number of other cryptocurrencies is another buying opportunity on the road to higher prices. According to opponents, the price action is a sign of instability on the road to darkness.
Bulls and bears make an active and liquid market, so naysayers and supporters will likely fuel a continuation of active trading and volatility. The variance in prices creates a paradise for traders but can be a nightmare for investors.
The asset class of cryptocurrencies remains in its infancy. The short-term picture is a picture of lower highs from the highs in April and May. The medium term remains bullish as the appreciation has been nothing short of parabolic.