Cryptocurrency prices fell on Tuesday as El Salvador became the first country to adopt bitcoin as legal tender.
President Nayib Bukele, who lobbied for the adoption of the cryptocurrency, said it would help Salvadorians save around $ 400 million, according to government calculations, spent annually on remittance commissions. .
Bukele said last month that the country would open 200 ATMs and 50 kiosks on Tuesday to allow its citizens to conduct Bitcoin exchanges.
The change means companies could accept bitcoin payments alongside the US dollar, which has been El Salvador’s official currency since 2001 and will always be legal tender.
Supporters of the move say it will reduce commission fees for billions of dollars sent from overseas, while critics have warned it could fuel money laundering.
Bitcoin fell 9.4% to $ 46,854, after crossing $ 52,000 on Monday, its highest level since May.
Ethereum sank 12.7% to $ 3,436 and DogeCoin fell almost 19% to 24 cents.
Bukele said on Twitter on Tuesday morning that El Salvador had temporarily disabled Chivo, its government-run bitcoin wallet, to increase server capacity, preventing new users from settling in, CNBC reported.
Meanwhile, JPMorgan chief executive Nikolaos Panigirtzoglou said retail investors have been pushing altcoins to new highs since early August, according to Forbes.
He pointed out that Bitcoin and Ethereum’s market share fell from 78% on August 4 to around 67% due to declining institutional interest in funds linked to the two major cryptocurrencies.
Panigirtzoglou said that bitcoin’s market share in particular appears “uncomfortably small” by historical standards – a likely reflection of “the froth and retail investor mania”, as opposed to lasting gains.
Winston Ma, former managing director and head of North America at China Investment Corp., said the newly aggressive Securities and Exchange Commission is stepping up regulatory action after the hawkish speech by SEC Chairman Gary Gensler at the Aspen Security forum.
In his remarks, Gensler warned “we just don’t have enough investor protection in crypto” and added that, “frankly, right now it’s more like the Wild West.”
Ma, author of “The Digital War – How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace,” said the SEC’s investigation of Uniswap, the developer of the world’s largest decentralized cryptocurrency exchange, ” is a decisive moment “.
Regulators are investing in how products created by Uniswap Labs, which developed the DeFi Uniswap exchange, are used and marketed to customers, according to the Wall Street Journal.
The company told the New York Post in a statement that it was “committed to complying with the laws and regulations governing our industry and providing information to regulators that will assist them in any investigation.”
“Decentralized exchanges are central to the creation of crypto products in the same way that stablecoins are central to the transaction of crypto products,” Ma said. “With the SEC reviewing the stock exchanges and the US Treasury reviewing stablecoins, the US crypto industry may soon adopt a whole new regulatory framework. “
David Lesperance, Managing Partner of Immigration and Tax Advisor with Lesperance & Associates, noted that Sam Bankman-Fried, who co-founded the FTX crypto exchange, said that if cryptocurrencies self-regulate, “government regulators will drop their current (and entirely predictable) pressure to impose Know-Your-Customer and Anti-Money Laundering Measures. “
“I wonder if those who use his exchange or his investors share his optimism?” Asked Lespérance. “If he’s wrong, he doesn’t need to look any further than Arthur Hayers to get a glimpse of his future. FTX investors and exchange users don’t need to look any further than the experience of their BitMex peers. “
Hayes, former BitMex CEO, was accused in April of violating bank secrecy law. His lawyers at the time said Hayes was “a self-taught entrepreneur who was wrongly accused of crimes he did not commit.”