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Bitcoin bruised after chaotic debut as legal tender in El Salvador


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Bitcoin falls 8.9% to $34,156 - The Economic Times

TOKYO (Reuters) - Bitcoin licked its wounds on Wednesday, a day after its heaviest losses in 2-1/2 months as El Salvador's historic adoption of the crypto asset as legal tender caused chaos online and on the street.

The coin last traded at $46,560, having endured wild trade the day before in which it hit a near four-month high of $52,956 before plunging 11.1%, its largest fall since June 2.

Analysts said the sharp retreat was partly due to investors who had bought the rumour of El Salvador's move now selling the fact.

"I think there was some anticipation building ahead of that event (El Salvador), similar to what we saw ahead of Coinbase (NASDAQ:COIN) listing on Nasdaq," said Henrik Andersson, chief investment officer at Apollo Capital, a crypto asset fund in Melbourne, Australia.

At one point on Tuesday, the digital currency fell as much as 18.6%, wiping out more than $180 billion from the market.

It was a historical day for bitcoin as El Salvador's experiment of making it legal tender got off to a bumpy start.

Technological glitches hampered its use while street protests by mistrustful citizens broke out in the Central American country.

As bitcoin wobbled, Salvadoran President Nayib Bukele said his government purchased an additional 150 bitcoins on Tuesday, worth around $7 million.

"That has underscored the difficulty in trying to protect the value of bitcoin as its own currency," said Nana Otsuki, chief economist at Monex Securities. "The buying didn't seem to be effective in halting its fall."

 

Amid the trading frenzy, major U.S. cryptocurrency exchanges Coinbase Global Inc, Kraken and Gemini struggled with delays in some transactions. All of them said their systems have since been restored.

Separately, the U.S. securities regulator has threatened to sue Coinbase Global if the crypto exchange proceeds with plans to launch a programme allowing users to earn interest by lending crypto assets.

 

 

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For whoever is interested in the official document grouping the fifteen laws regarding bitcoin in El Salvador, here is the link to the document from their parliament's website.

https://www.asamblea.gob.sv/sites/default/files/documents/decretos/27B82BC1-1683-4BEF-94FB-9A6DAB1F08CF.pdf

In case you would like to translate it into English, Google translate offers a quick link at:

https://translate.google.com/

 

From what I've heard and seen in the news, the initial proposal seems to be ambiguous in many terms and people are sceptic to adopt it. Apparently the government allows people to use their bitcoins only if they move it to the official wallet first (chivo wallet app), linking their identities to it.  

Edited by jlz
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To date NO government/country has ever managed to prop up their currency - if its collapsing, its collapsing - The buying didn't seem to be effective in halting its fall."!

As for BC - Keep saying it will only happen ~"IF" the USA /FED lets it - Last paragraph above confirms that, as soon as BC becomes main currency it threatens everything those who conned the world in 1913 strove for, they ain't letting it be main currency without getting repaid every trillion $ outstanding plus some

Lots of pro traders are advising people jump into it - I'm not one of them, it'll prosper as a trading vehicle but just my personal views, the FED will put up one hell of a fight if it tries to become the worlds currency

If the FED can work out a way to prosper from digital currency then they'll launch something

Just my views, not backed up by anything other than observation over the decades and a little research into the FED as an entity

 

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1 hour ago, THT said:

To date NO government/country has ever managed to prop up their currency - if its collapsing, its collapsing - The buying didn't seem to be effective in halting its fall."!

As for BC - Keep saying it will only happen ~"IF" the USA /FED lets it - Last paragraph above confirms that, as soon as BC becomes main currency it threatens everything those who conned the world in 1913 strove for, they ain't letting it be main currency without getting repaid every trillion $ outstanding plus some

Lots of pro traders are advising people jump into it - I'm not one of them, it'll prosper as a trading vehicle but just my personal views, the FED will put up one hell of a fight if it tries to become the worlds currency

If the FED can work out a way to prosper from digital currency then they'll launch something

Just my views, not backed up by anything other than observation over the decades and a little research into the FED as an entity

 

Agreed, I keep saying almost the same to everyone.
We just have to look at the attempts that countries are planning to build CBDCs , we will see those coins soon in circulation. They will obviously be part of the same gang.
Today we have seen one the strongest falls in the price of BTC, I can't see a single news' agency in favour of the opening day at El Salvador. There is a clear attempt to undermine any attempt for any country to become independent from the dollar.

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Hi @jlz and @THT,

El Salvador's bitcoin law states the market will establish the exchange rate between the cryptocurrency and the U.S. dollar, the nation's other legal tender. It says all prices may be expressed in bitcoin and tax contributions can be paid in digital currency, while currency transactions in bitcoin are not subject to capital gains taxes.

The central bank presidents for Honduras and Guatemala both said the banks were studying digital currencies with the aim of eventually introducing them into the economy, including via a central bank digital currency. Officials said on Wednesday, following El Salvador's adoption of Bitcoin as legal currency.

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3 hours ago, MongiIG said:

Hi @jlz and @THT,

El Salvador's bitcoin law states the market will establish the exchange rate between the cryptocurrency and the U.S. dollar, the nation's other legal tender. It says all prices may be expressed in bitcoin and tax contributions can be paid in digital currency, while currency transactions in bitcoin are not subject to capital gains taxes.

The central bank presidents for Honduras and Guatemala both said the banks were studying digital currencies with the aim of eventually introducing them into the economy, including via a central bank digital currency. Officials said on Wednesday, following El Salvador's adoption of Bitcoin as legal currency.

I don't really watch it or keep up with it, until the USA allow it to happen under their control or China forces through a reserve digital currency I'm not joining the party

 

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25 minutes ago, THT said:

I don't really watch it or keep up with it, until the USA allow it to happen under their control or China forces through a reserve digital currency I'm not joining the party

 

Hi @THT,

China wants to run its own digital currency, their digital yuan.

Earlier this year Federal Reserve Chairman Jerome Powell calls cryptocurrencies ‘not really useful stores of value’ and says Fed will move slowly.

He said cryptocurrencies are primarily “a speculative asset, they’re highly volatile and therefore not really useful stores of value and they’re not backed by anything,” Powell said during a virtual panel discussion on digital banking hosted by the Bank for International Settlements. “It’s more a speculative asset that’s essentially a substitute for gold rather than for the dollar.” He added that there’s no hurry to develop a central bank digital currency but a Digital dollar is ‘high-priority project for us’

Are your views the same as Jerome Powell or you have a different view on cryptocurrencies ?

 

MongiIG

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1 hour ago, MongiIG said:

Hi @THT,

China wants to run its own digital currency, their digital yuan.

Earlier this year Federal Reserve Chairman Jerome Powell calls cryptocurrencies ‘not really useful stores of value’ and says Fed will move slowly.

He said cryptocurrencies are primarily “a speculative asset, they’re highly volatile and therefore not really useful stores of value and they’re not backed by anything,” Powell said during a virtual panel discussion on digital banking hosted by the Bank for International Settlements. “It’s more a speculative asset that’s essentially a substitute for gold rather than for the dollar.” He added that there’s no hurry to develop a central bank digital currency but a Digital dollar is ‘high-priority project for us’

Are your views the same as Jerome Powell or you have a different view on cryptocurrencies ?

 

MongiIG

I think the USA are coming it from a "Its a threat to the US$ and reserves" point of view as if they (the people behind the FED which is not the USA citizens) adopt digi currency then it needs to be able to be controlled by those controlling the US$ now - Which they simply won't go down without a massive fight as if they lost control of the US$ they'd lose a huge amount of debt, reserves etc

I'm not saying it won't happen, I'm just saying the FED will do everything in its power to stop it or they'll want to be the main ones creating, issuing and managing it as they current are the worlds official reserve currency - which if they don't could lead to WWIII or something like that!

This a quote that President Woodrow Wilson said shortly before his death:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."

Before 1913, those group of men tried everything to force the govts hand to create a federal reserve to no avail - also back in the UK during the napoleon wars in France, 1 family who is part of that small group of men, had "runners" observing the war, so that when it was clear which side [France or Britain] had won, they'd get back to the London markets to buy sell appropriately in huge quantities!

Now I don't want to stir anything up either, but those men he refers to are owners of Americas big banks and financiers and if you research the FED in-depth, you'll find that all past Chairpersons of the FED are all of one particular religious faith, which although nothing wrong with that, shows that the job is pre-destined to a person of the same faith as those controlling the FED and who the FED tell the govt to nominate etc, so basically the jobs a set rigged affair which is scandalous in a "free nation", which then isn't obliviously that free!  

My own personal view of crypto's are they are a tradeable market at present (although I just personally chose not to trade/Invest in them for no other reason than its another market to look at) - As a currency I personally think it needs to be backed by gold to be a valid currency and I doubt there's enough mined gold out there in the world to back a major reserve currency etc and the money laundering ease of using crypto's will need to be addressed by govts

Saying that if the US$ were forced to convert every $ out there into its asset back value in Gold, I doubt there's enough gold in storage to be able to honour the payments - which is most likely why the stock take/Inventory for Fort Knox isn't Independent no freely available

I'm in a position where i can sit on the fence and watch, at present the market is purely speculative BUT as a currency there's the opportunity for a big player to get involved and try to force out the US$ which is were the fun and games might lie going forward due to the above information I've highlighted - I think one of the main risks is the use of digi currency on the black underground market, govts just won't let happen, they'll end up regulating it or something and that could cause it to plummet in value

Lots of If's, buts and maybes! fo me though until its a trustable market to trade I won't be diving in , I think powell at present is talking it down to avoid it rivalling the US$ or gaining ground as such - then all of asudden we'll have a digi currency backed by the USA which they are now happy with which will then be "the" digi currency to own, unless China get there first!!!!!!

Whatever, happens, I'll still trade the SP500, FTSE100, FTSE250, EURUSD, GOLD and Corn, Soybean etc as per usual 

 

 

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18 hours ago, THT said:

I think the USA are coming it from a "Its a threat to the US$ and reserves" point of view as if they (the people behind the FED which is not the USA citizens) adopt digi currency then it needs to be able to be controlled by those controlling the US$ now - Which they simply won't go down without a massive fight as if they lost control of the US$ they'd lose a huge amount of debt, reserves etc

I'm not saying it won't happen, I'm just saying the FED will do everything in its power to stop it or they'll want to be the main ones creating, issuing and managing it as they current are the worlds official reserve currency - which if they don't could lead to WWIII or something like that!

This a quote that President Woodrow Wilson said shortly before his death:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."

Before 1913, those group of men tried everything to force the govts hand to create a federal reserve to no avail - also back in the UK during the napoleon wars in France, 1 family who is part of that small group of men, had "runners" observing the war, so that when it was clear which side [France or Britain] had won, they'd get back to the London markets to buy sell appropriately in huge quantities!

Now I don't want to stir anything up either, but those men he refers to are owners of Americas big banks and financiers and if you research the FED in-depth, you'll find that all past Chairpersons of the FED are all of one particular religious faith, which although nothing wrong with that, shows that the job is pre-destined to a person of the same faith as those controlling the FED and who the FED tell the govt to nominate etc, so basically the jobs a set rigged affair which is scandalous in a "free nation", which then isn't obliviously that free!  

My own personal view of crypto's are they are a tradeable market at present (although I just personally chose not to trade/Invest in them for no other reason than its another market to look at) - As a currency I personally think it needs to be backed by gold to be a valid currency and I doubt there's enough mined gold out there in the world to back a major reserve currency etc and the money laundering ease of using crypto's will need to be addressed by govts

Saying that if the US$ were forced to convert every $ out there into its asset back value in Gold, I doubt there's enough gold in storage to be able to honour the payments - which is most likely why the stock take/Inventory for Fort Knox isn't Independent no freely available

I'm in a position where i can sit on the fence and watch, at present the market is purely speculative BUT as a currency there's the opportunity for a big player to get involved and try to force out the US$ which is were the fun and games might lie going forward due to the above information I've highlighted - I think one of the main risks is the use of digi currency on the black underground market, govts just won't let happen, they'll end up regulating it or something and that could cause it to plummet in value

Lots of If's, buts and maybes! fo me though until its a trustable market to trade I won't be diving in , I think powell at present is talking it down to avoid it rivalling the US$ or gaining ground as such - then all of asudden we'll have a digi currency backed by the USA which they are now happy with which will then be "the" digi currency to own, unless China get there first!!!!!!

Whatever, happens, I'll still trade the SP500, FTSE100, FTSE250, EURUSD, GOLD and Corn, Soybean etc as per usual 

 

 

Hi @THT,

Thanks for sharing your in depth insights, it was an enjoyable and interesting read.

Much appreciated for sharing.

 

All the best - MongiIG

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  • 2 months later...

IMF warns El Salvador against crypto official currency as country plans Bitcoin City.

image.png

The International Monetary Fund warned El Salvador on 22 November against using bitcoin as official tender given the risks associated with the cryptocurrency, a day after the country announced plans for the world's first 'Bitcoin City'.

El Salvador became the first country to adopt Bitcoin as a legal tender on September 7, 2021 .

The latest development has seen President Nayib Bukele making a statement that El Salvador plans to build a 'Bitcoin City' powered by a volcano and financed by cryptocurrency bonds.

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