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As of midnight UK time, the value of Bitcoin fell from $ 37,349 to $ 35,063 at 5:50 a.m., a 6.1% drop with the price of Ethereum and Dogecoin also falling. . Dogecoin saw a 7.8% drop after the price of memecoin fell from $ 0.300 at 9:30 p.m. to $ 0.303 at 5:50 a.m. Ethereum fell 3.7% between midnight and 2:30 a.m., before recovering slightly.
Ethereum’s price now sits at $ 2,298.
The price of cryptocurrencies soared in value this week after El Salvador deemed bitcoin legal tender.
However, the current reversal in price assessment could be due to a recent statement by the central bank regulator, the Basel Committee on Banking Supervision.
Many banking groups plan to gain exposure to cryptocurrency assets, such as bitcoin.
The Basel Committee on Banking Supervision watchdog group advised these banks to set aside enough capital to cover losses on bitcoin holdings.
The regulator’s advice on crypto-asset exposures would make it very expensive for banks to hold digital currencies.
This in turn could hamper wider market acceptance of crypto assets such as bitcoin.
One proposal made by the regulator is to attach a 1,250% risk to a bank’s exposure to bitcoin and certain other cryptos such as Ethereum.
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If Salvadorans start using bitcoin to send money from overseas, it is possible that nearly $ 6 billion a year will be converted into the world’s largest cryptocurrency.
According to the World Bank, the country has one of the highest GDP to remittance ratios in the world.
In another tweet, the Salvadoran president said, “This will bring financial inclusion, investment, tourism, innovation and economic development to our country.
“The government will guarantee convertibility at the exact dollar value at the time of each transaction,” Bukele said.
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