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Bitcoin enthusiasts at El Zonte beach in Chiltiupan, El Salvador. Photo: José Cabezas / Reuters
The price of bitcoin (BTC-USD) hovered just below $ 40,000 (28,633) on Thursday as the World Bank rejected a request from El Salvador to help implement cryptocurrency as a currency legal.
The bank said it couldn’t help El Salvador implement bitcoin due to the environmental impact of bitcoin mining and the downsides of transparency. It comes as research by the Financial Conduct Authority (FCA) has revealed an increase in the ownership of crypto-assets in the UK.
“We are committed to helping El Salvador in many ways, including currency transparency and regulatory processes,” a spokesperson for the international lender told Reuters.
“Although the government has contacted us for help on bitcoin, this is not something the World Bank can support given the gaps in environment and transparency.”
Bitcoin was trading at around $ 39,167 on Thursday morning.
Bitcoin hovered just below $ 40,000 per coin on Thursday. Chart: Yahoo Finance
Earlier this month, El Salvador became the first country to adopt bitcoin as legal tender, with its President Nayib Bukele touting the potential of cryptocurrency as a transfer currency for Salvadorans abroad.
The Central American country plans to use bitcoin as a parallel legal tender alongside the US dollar. However, it could now face problems meeting its deadline to secure acceptance of bitcoin within the next three months after the World Bank decision.
El Salvador’s Finance Minister Alejandro Zelaya said on Wednesday that talks with the International Monetary Fund (IMF) have so far been successful. He said the IMF was “not against” the implementation of bitcoin.
On Thursday, the FCA estimated that 2.3 million adults in Britain now hold cryptoassets, up from 1.9 million last year, with a growing number seeing them as a supplement or an alternative to traditional investments.
Enthusiasm for cryptoassets is also increasing, with more than half of cryptocurrency users reporting having had a positive experience so far and are likely to buy more from 41% to 53%, a declared the FCA. Fewer people also regret buying cryptocurrencies, down from 15% to 11%.
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Sheldon Mills, FCA’s executive director for consumers and competition, said: “The market has continued to grow and some investors have taken advantage of the higher prices.
“However, it is important that customers understand that because these products are largely unregulated, if something goes wrong it is unlikely that they will have access to the FSCS or the Financial Ombudsman Service. If consumers invest. in these types of products, they have to be prepared to waste all of their money. “
Watch: What is bitcoin?
The price of bitcoin received a boost this week after bullish comments from financial manager Paul Tudor Jones and Tesla boss (TSLA) Elon Musk.
Jones compared bitcoin to gold on Monday, saying it would be a good way to protect his wealth and diversify his portfolio.
I like bitcoin as a tool for portfolio diversification. Everyone asks me what should I do with my bitcoin? The only thing I’m sure I want 5% gold, 5% bitcoin, 5% cash, 5% commodity. At this point, I’m not sure what I want to do with the remaining 80% until I see what the Fed is going to do, Jones told CNBC Squawk Box.
Meanwhile, Musk had tweeted that his electric car maker would resume accepting bitcoin once it became more environmentally friendly.
Bitcoin mining has already been shown to consume more power than small nations mining due to the high levels of computer processing power required.
Read more: Bitcoin price drops as venture capitalist sticks to $ 250,000 forecast
Cryptos have recently been boosted by institutional support. Several organizations, including MicroStrategy (MSTR), have invested billions of dollars in cryptocurrencies and traditional financial firms like PayPal (PYPL) and Goldman Sachs (GS) have started to manage assets on behalf of clients.
However, according to a Bank of America survey, 81% of fund managers say bitcoin is still a bubble.
Cryptos have faced stiff opposition from governments and central banks who have insisted on regulating digital currencies.
On Tuesday, Bank of England (BoE) Governor Andrew Bailey said digital currencies would not get a regulatory “free pass” in the future, despite their potential for innovation, thus doubling their potential for innovation. earlier position that bitcoin is not money and has no intrinsic value. value because it has no support.
Watch: What are the risks of investing in cryptocurrency?
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