El Salvador Breaks the Ice! Sep 9, 2021
El Salvador Breaks the Ice!
El Salvador made history this week as it officially started accepting Bitcoin as legal tender. The Central American nation celebrated the milestone Tuesday morning with charismatic President Nayib Bukele giving a speech on the matter, claiming that El Salvador was leading the world with its decision. Along with this law passing, the El Salvadoran government launched their own native crypto wallet, called Chivo (Spanish for ‘Cool’). Although the crypto markets felt a sharp pullback on Tuesday, the government of El Salvador and President Bukele remained optimistic - “Buying the dip, 150 new coins added. #BitcoinDay #BTC” the President tweeted amidst the chaos within the market. Time will tell how well this position will pay off for El Salvador and whether or not their President brought in at the top or bottom.
BTC: Don’t Run for The Hills Just Yet
A sharp and sudden retreat of value in the market came early Tuesday along with the news of El Salvador adopting Bitcoin as legal tender. The price of BTC dropped to $43k very suddenly, causing a cascade of sell action amidst traders, which also took the value of many other blue-chip coins down as well. This quick sell off sent many who were long on their positions to hang on for dear life, but the markets soon recovered with BTC’s price stabilizing quickly to around $46k at the time of this article being written. Though some institutions and traders were sent running for the hills, many see this pullback as a healthy correction to continue moving forward through this market cycle. Well known analyst and institutional trader Scott Melker pointed the finger at large-volume traders and ‘whales’, as some like to call them: “Leave it to the whales to dump Bitcoin on the day that El Salvador makes it legal tender”.
Tensions Mount Between SEC and Coinbase
Wednesday morning kicked off with news that the SEC is actively threatening Coinbase with immense legal charges over one of their upcoming lend product offerings. Making good on his promise to tame the ‘wild west’ of finance, Gary Gensler, the Securities and Exchange Commission Chair, led the assault against Coinbase and its CEO Brian Armstrong. In a series of tweets reacting to the allegations, Armstrong claimed that Coinbase has been fully compliant with the SEC and has even been proactively updating them with internal affairs, which the SEC responded to with unpredictable hostility and false allegations. Amidst his tweet-storm, Armstrong claimed “In this case they are refusing to offer any opinion in writing to the industry on what should be allowed and why, and instead are engaging in intimidation tactics behind closed doors. Whatever their theory is here, it feels like a reach/land grab vs other regulators”. We’ll see how this story unfolds in the coming weeks, and whether or not SEC is willing to be transparent in enforcing regulation.