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| Your Weekly Update On All Things Crypto |
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| Bitcoin Day: El Salvador Officially Starts Accepting Bitcoin As Legal Tender |
Last Tuesday, September 7th will now forever be remembered as Bitcoin day as it marked the first-day legislation came into effect for Bitcoin to become legal tender in El Salvador. The central American country became the world's inaugural nation to make Bitcoin (BTC) legal tender and official alternative currency. Proponents of digital money, including the nation's leader Nayib Bukele, believe that the new policy is certainly revolutionary, ground-breaking, and historic to say the least.
However, it must be said that the first several hours of Bitcoin's legal status in El Salvador were hampered by technological issues and glitches when the government launched its digital wallet software to the residents in the beginning. Still, the significance of this recent decision to legalize the flagship cryptocurrency cannot be understated, and while Bitcoin might currently be in a dip, the country’s government is hopeful that this was the right move and has hence bought even more BTC. Why did El Salvador do this? President Bukele has stated that legalizing Bitcoin will encourage investment in the nation and benefit the nearly 70% of the country's citizens who lack access to conventional financial services. The leader added that there is both a need and a desire to break free from the norms of the past and that El Salvador has earned the right to progress into the developed world. Furthermore, per the decree of the nation’s leader, all businesses will now be required to accept Bitcoin, however, there will be a choice to receive either USD or BTC regarding the settlement of various transactions.
President Bukele had additionally stated that utilizing Bitcoin would be an efficient method to transmit considerable amounts in remittances that Salvadorans residing outside the nation send back to their homeland annually. In related news, El Salvador's government also reportedly has 550 BTC at the moment, with the country's other official currency being the United States Dollar (USD). Not everyone is on board While there were expectedly some technological challenges such as glitches and minor hiccups when citizens started actually using BTC that are still being resolved, the fact remains that not everyone has been supportive of the decision to legalize Bitcoin. However, most of the protestors have stated that the primary reason as to why there is so much anti-Bitcoin sentiment is because a sizable portion of the country’s residents does not know the first thing about the flagship cryptocurrency, or the cryptocurrency industry in general. President Bukele has nevertheless stated that education-based efforts will be administered in order to remedy this situation.
Furthermore, both the IMF and the World Bank have been hesitant to support the new decision, especially the former as the International Monetary Fund believes that legalizing Bitcoin could jeopardize the country's ties with the global organization. Moreover, according to CNN, judges are chosen by El Salvador's parliament, which itself is largely governed by Bukele's party, declared this past Friday that the president may run for a 2nd term in 2024. According to a few analysts, this is reportedly prohibited by the national constitution. The decision, according to the U.S Embassy in El Salvador, ‘sets a dangerous precedent and further erodes El Salvador's worldwide reputation as a liberal and reliable partner in the area’.
Meanwhile, other nations in the surrounding regions have expressed their support for the decision, and even Edward Snowden has praised El Salvador’s efforts in legalizing Bitcoin. |
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| SEC Threatens Coinbase With Lawsuit Over Lending Feature |
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Coinbase reports on an open book SEC approach with a not yet launched program called Coinbase Lend, in a recent blog. The proposed program Lend allows users of Coinbase to earn interest by lending their USDC and other select assets on the exchange. Coinbase says, 'The SEC has told us it wants to sue us over Lend. We don’t know why.' Though many similar unauthorized programs have been in operation for some time on other exchanges, Coinbase took the path of full disclosure with the SEC prior to launch. In response to Coinbase's transparent and honorable approach, they report the SEC is being quite unclear regarding the reasoning behind their decisions and treatment of this voluntary application for offering approval.
Coinbase explains the lengths to which they have gone to provide information to the SEC regarding the Lend program and states the SEC response has been unclear, to an extent unwarranted and invasive regarding requests for user personal information. These determinations arrived at considering the unauthorized similar lending offerings by other crypto businesses, and Coinbase's forthwith approach to seeking the SEC's approval for this product.
Did they set themselves up to become an example? The SEC has told Coinbase that if they launch the Lend program then they intend to sue. When asked for their reasoning on this, a lack-luster response came back. The response regarding their reasoning was that the SEC was referencing very old specific supreme court cases as a measure, and a measure had been taken. No sharing of specific parameters of their assessment, the SEC seems interested in skipping basic regulatory work and jumping straight into litigation on the matter. Not an encouraging response to say the least.
The SEC reaction to Coinbase on this product leaves the product on hold until more clarity can be provided. 'Coinbase continues to welcome additional regulatory clarity; mystery and ambiguity only serve to unnecessarily stifle new products that customers want and that Coinbase and others can safely deliver.' This quote from the blog we think is an excellent summary of the issue currently. We think the SEC reaction speaks beyond simply stifling this one product. It may also reveal the possible direction for regulation stifling the entire industry within the United States.
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| 10T Holdings Raises $750 Million For First Growth Equity Funds |
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| As investment in the crypto industry has exploded this year, private equity company 10T Holdings has received over $400 million in commitments for its initial two growth equity funds relating to digital asset firms. 10T raised about $750 million for the initiative, which includes the 10T Fund as well as the 10T DAE Expansion Fund, through co-investment and sub-advised vehicles. According to the firm, the majority of the cash has already been allocated. ‘Demand for the offering was fantastic’, according to Dan Tapiero The 10T Fund initially closed with roughly $120 million this past January, according to CEO Dan Tapiero, who noted that the demand regarding the offering was indeed so high that the business kept it available to investors. Furthermore, the fund's initial couple of investments, namely concerning that of both eToro and Kraken, grew astronomically, per the words of the CEO. With the exception of these two, the business opted to establish the 10T DAE Expansion Fund to make investments in the same organizations as the inaugural fund. The portfolios are therefore divided into three categories, namely bridges to virtual asset ecosystems, blockchain infrastructure firms, and finally next-generation financial services. The CEO stated that the aim was always to include up to four businesses within every 'box', so to speak, and establish a diversified exposure for traders. The investors in question primarily consist of those who do not possess a comprehensive understanding of tokens, cryptocurrencies, protocols, or early-stage enterprises, as well as those who may not be all that venture-oriented. What to expect for Bitcoin and crypto in general The CEO predicts that BTC’s price would rise to somewhere between $300,000 and $500,000 within the next three to four years. He added that the argument could be made for much higher numbers, but that the aforementioned range is more or less reasonable as of this time. He added that even now, only a decade or so after Bitcoin had burst onto the scene, the asset could be undervalued and many still fail to realize just how much of a global impact its introduction has truly had. Of course, this is not to say that Bitcoin doesn’t have its fair share of critics, as naysayers have been spouting the same rhetoric for a long time and continue to do so about how the world’s biggest cryptocurrency by market capitalization will not last in the long-term. For his part, Tapiero believes that while the younger generation is on board with cryptocurrencies , those aged above 60 are still not entirely convinced. |
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| Bitcoin Drops 20% On The Day It Becomes Legal Tender In El Salvador |
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| We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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