According to Moody’s, Bitcoin adoption has reduced the likelihood of a loan extension by the IMF to pay for the bond. Many Salvadorans have doubts about the economic decisions by Bukele, but his popularity is still above 75%.

Nayib Bukele, the non-conformist Salvadoran president, has made one of the boldest economic decisions by adopting Bitcoin as a legal tender. Although many people consider that choice progressive, the balance sheet of the Central American country has not yet shown its advantages.

Bitcoin Losses Have Increased Due to the Market Collapse

Bukele announced the creation of Bitcoin City, a Bitcoin-based tax-free haven, but it became only a statement of intent. Although the idea still exists, the Salvadoran government has not done much about building the city.

A USD 1 billion Bitcoin bond to fund the energy and mining infrastructure has been subject to delays. When the government announced it in November, they said they expected to use that money to buy more BTC.

According to the nayibtracker.com website, the Salvadoran president is 57% below his bet on Bitcoin. Since September 2021, the Central American country has purchased 2,381 BTC at an average price of USD 45,000.

Although that represents USD 107.2 million, the portfolio is worth only USD 46.27 million. The decision by Nayib Bukele to acquire Bitcoin, going against the warnings of the International Monetary Fund (IMF), still seems unjustifiable.

El Salvador Does Not Abandon the Idea of Adopting Bitcoin

The warnings did not stop Bukele, who has insisted that he is leading his nation well. For example, he has done an excellent job regarding other areas like tourism, whose receipts are among the best in the post-pandemic era.

According to the World Bank, the arrival of international tourists has increased from 707,000 in 2020 to over 1.2 million. However, rating agencies believe that the risk profile of El Salvador will worsen further with the cryptocurrency path.

Fitch Ratings recently downgraded El Salvador to CC from CCC, saying it might default on foreign bonds. The most recent rating is nine times lower than BBB, the minimum needed to qualify for investment.

There might be a bank default due to tight fiscal external liquidity positions and limited market access. High financing needs and a considerable external bond maturity of USD 800 million in January 2023 might also contribute to it.

Moody’s, another rating firm, considers that Bitcoin adoption is responsible for the potential default. In January, it said that government-related policy differences had reduced the likelihood of the IMF extending a USD 1.3 billion loan.

The Salvadoran president said he hoped to use that money to pay for the upcoming maturity of the bond. Since March 2021, the Central American country has negotiated an agreement with the IMF.

Nayib Bukele Seeks to Run for a Second Term as President

Although many doubt his leadership style and economic decisions, Bukele is still very popular in his country. After taking office on June 1^st, 2019, his popularity has remained above 75%.

According to research firm Cid Gallup, the ratings are increasing and stand at 86%, making him the most popular Latin American president.

Bukele intends to run for a second term as president after his current term expires in 2024. He hopes public sentiment will remain on his side and the Bitcoin market will stop its downward spiral and recover.

By Alexander Salazar

The White House has unveiled its Digital Asset Development Framework, which outlines the benefits and risks of cryptocurrencies in the United States.

Until this week, there was no clear regulatory framework for cryptocurrencies in the United States. Today, the White House published its first cryptocurrency regulatory framework. Although it is still subject to reforms and considerations, it is an important advance. The investigators appointed in March by President Joe Biden have had six months to issue the first report and regulatory framework.

Regulatory Framework Highlights

The regulatory framework is the result of the joint work of different federal agencies to achieve the objectives requested by the president in his executive order. The main objective of the commission was to investigate the risks and benefits of cryptocurrencies and to issue official reports about them.

The framework describes ways and means of proceeding by companies and users for a positive development of the environment. That is, to achieve transfers without borders, as well as an environment free of illicit transactions or fraud.

The new directives highlight the use of existing federal agencies. This could save the bureaucracy and processes before Congress. However, it is still necessary for the president to decide whether to put it to a vote in Congress.

In particular, two federal agencies, the Securities and Exchange Commission and the Commodity Futures Trading Commission are listed in the regulatory framework, although nothing is established yet, and dependencies are under development. Washington’s long-awaited decision to regulate cryptocurrencies has been long overdue, and now, the whole industry is watching intently.

The specialized team has been working on its own regulatory frameworks and policy recommendations. In addition, a list of half a dozen priorities was created on the basis of the priorities listed by the executive order.

On the other hand, this regulatory framework lays out paths to follow for the United States government, so as to maintain its fundamental role in the world economic system, while working towards financial inclusion. The aim of ​​these guidelines is to position the United States as a leader in the industry and establish new governance in digital assets.

The Fight Against Illicit Activities

This effort by the United States to create a regulatory framework for cryptocurrencies is due to illicit activities, from tax evasion to drug trafficking or financing terrorist organizations. All of these highly government-monitored activities affect the Blockchain and cryptocurrencies.

Although the privacy and anonymity of cryptocurrencies were not intended for criminal activities, it has been developed that way. To carry out this fight, the commercial framework of cryptocurrencies must be regulated.

Likewise, President Joe Biden is studying a proposal where sanctions for the transmission of money without a license can be increased. In this sense, the modification of federal statutes that allow the Department of Justice of the United States to act in any jurisdiction, regardless of where the victim is, is also considered.

The framework released today also looks at the potential and “significant benefits” of central bank-issued digital currencies. This could be considered a particular form of digital US dollar. Although there are already coins of this type called stablecoins, such as USDT and USC, they are basically cryptocurrencies pegged to the value of the dollar with a backing.

By Audy Castaneda

The second largest cryptocurrency is going through “The Merge”. This is a change that can forever change the crypto world.

Between September 10 and 20, expectations grew regarding The Merge of the Ethereum Blockchain network. This implied a change in its consensus protocol, which is the mechanism through which transactions are registered in it.

Ethereum had a consensus protocol called Proof of Work (PoW) or Proof of Work (more colloquially known as mining) and went on to have the so-called Proof of Stake (PoS) or Proof of Participation.

The transactions were added to the Blockchain (distributed network online database in which the transactions are registered under the community of peers, that is, in which there are no nodes -participants- with different hierarchies being all in equal conditions) of Ethereum, no longer as a result of a competition that allows its winner to obtain a reward in cryptocurrencies, but through a random process through which participants are chosen to validate the transactions and obtain a reward for it.

How is Participation Achievable?

The answer is very simple: you must have cryptocurrencies of that project and block them (that is, stop having them freely) to obtain rewards in exchange (this is called “staking”). Now, the election process is random, so you work with probabilities, but the more cryptocurrencies of the project you have, the more likely you are to be chosen.

Technically, The Merge has two stages: one is Bellatrix and the other is Paris; the improvements in Ethereum are expected to be in terms of environmental impact, security, and scalability (number of transactions that can be recorded in a Blockchain, for example, by second).

It should also be remembered that, recently, the well-known Ethereum Beacon Chain was launched, that is, its future main and management network. By defining it as a management network, it is in charge of managing the Shard Chains, which are those networks within Ethereum that will be parallel to the Beacon Chain, and that are expected to help improve the scalability of the network.

To simplify the explanation, it would be like thinking that we have a main database where we record all the transactions, but in addition, we have parallel databases that allow us to record transactions that are later joined to the main database.

This further helps to increase the number of transactions that can be recorded for the time considered and will make them less expensive. This new upgrade phase is called Sharding and is expected to happen by the time The Merge has been executed.

Could This Update Generate an Impact on the Price of Ether and/or its Volatility?

Finally, a very common question is whether this update will have any impact on the price of Ether (ETH) and/or its volatility (price fluctuation).

Regarding the price, if The Merge is satisfactorily fulfilled, the price of ETH could seek an upward trend, at least in the medium term, bearing in mind the volatility that it may present in the short term, something as “buy the rumors and sell the news”, a phrase widely used in the world of trading.

The Merge may not bring less volatility to this cryptoactive, but the certainty of a project continues the search for improvements in the framework of the growth it had in recent years. It could be hoped to continue to sustain such growth in the framework of the decentralization of finances.

By Audy Castaneda

With this step, Honduras advances in its bitcoinization process, and it does so at a more than plausible speed.

The city of Roatán, Honduras, will launch a Bitcoin (BTC) ATM, thanks to the support of General Bytes. The venue was none other than Amity Age Academy, a center dedicated exclusively to BTC education in the city of Roatán.

The city of Roatán, Honduras, will launch a Bitcoin (BTC) ATM, thanks to the support of General Bytes. The venue was none other than Amity Age Academy, a center dedicated exclusively to BTC education in the city of Roatán. The good news was announced by the Bitcoiner and educator Dusan Matuska, through his official Twitter account.

Dusan Matuska has been active in bitcoin education since at least 2019 and has a goal of educating an estimated 100 million people about the benefits of the cryptocurrency. Regarding the achievement of the Bitcoin ATM in Honduras, Matuska said the following:

“First #Bitcoin ATM on #Roatan in #Honduras in our @AmityAge Academy operational from next week. Both way, LN supported, accepting USD and Lempiras from as little as 1 dollar. Freedom money is becoming available to all Roatan people. Thank you @generalbytes for this beast.”

Installing an ATM in a Country Foreign to the United States is Relatively Peculiar

According to the latest data from Coin ATM Radar, they showed that by August there were more than 39,000 cryptocurrency ATMs installed in the world, 14,000 more than the same month last year when there were 25,154 units.

87.9% of ATMs are installed in the United States. Representing the rest, less than one-eighth. Regarding the implementation of the new ATM, General Bytes commented on the following:

“Happy to see our B ATM Four safely delivered to the Caribbean island of Roatan! Wish the AmityAge Bitcoin Education Center good luck and we look forward to visiting you in person.”

Honduras, the Last Central American Country to Join Bitcoin Adoption

Honduras has made its interest in Bitcoin known only this year, however, it has done so vigorously. In less than a year, the country has garnered attention with the City of Prospera, announced by Samson Mow, and with the legal adoption of BTC in Bitcoin Valley. Now, it seems that this area of ​​Roatán will also join the bitcoinization throughout the country.

On August 22, Valle de Ángeles, Honduras joined the countries that promote the use of Bitcoin, and one month after the residents of the municipality of Santa Lucía began to use Bitcoin (BTC) as an instrument of exchange, Valle de Ángeles has been, ever since; the second municipality that uses this cryptocurrency.

The municipal authorities of Valle de Ángeles and members of the Chamber of Commerce contacted the promoters of the project in Santa Lucía (Blockchain Honduras, Decentral Academy, Coincaex, and the Technological University of Honduras) to join Bitcoin Valley.

The launch of this latest ATM can be considered both as a seed for future bitcoinization, and as a simple experiment. However different the magnifying glass with which you look at it, the degree of attention that the different Central American countries have attracted in terms of betting on BTC cannot be denied.

By Audy Castaneda

The value of ADA has dropped by 86% since August 2021, a sign that the crypto winter has affected it deeply. The development activity on Cardano has decreased while the price continues a long bearish trend.

Less than a week before the fifth and most relevant upgrade of the Cardano blockchain, the value of ADA continues to drop. Although the hard fork event promises higher scalability and lower transaction fees, that seems insufficient to sustain the price.

ADA has dropped freely for over three months, achieving modest recoveries, and investors seem to have lost positive expectations. The crypto winter deeply affected the confidence in ADA, but the market capitalization has only dropped by 4% over the last week.

ADA Might Suffer Further Decline before the Vasil Upgrade

ADA has lost 86% of its value since August 2021, a sign that the crypto winter has deeply affected it. According to trader and analyst Peter Brand, the pattern reflected by ADA will continue to move downward. Its underperformance and descending triangles signal another decline, as Brand described on Twitter.

However, the graph shows acceptance and a possibility that ADA will form a third ascending triangle. The first cases occurred in early September, and it is possible to see small gains before its long red candlesticks.

Optimistic expectations about the Vasil hard fork seem insufficient to lift the bearish investor sentiment on ADA. In its current trend, it is possible to see volatility by looking closely at the Bollinger Bands. That could change if ADA continues falling until some revealing event occurs after the upgrade is complete on September 22^nd.

On-Chain Metrics about the Price of ADA

The Santiment graph has shown that the thirty-day market value to realized value (MVRV) ratio was -0.0135%. In other words, the realized value of ADA is worth more than its market capitalization.

It is possible to see that almost nothing has happened on ADA, as development activity has decreased while the price continues a long bearish trend. The above indicates that it could fall further during the crypto winter if a relevant event does not occur after the Vasil hard fork.

While cryptocurrency investors wait for the Cardarno upgrade to occur, around 95% of the blocks have already emerged. However, the network must continue the process to reach the 75% threshold.

Meanwhile, ADA is trading at around USD 0.4769 and has accumulated a 3% gain over the last 24 hours. While its daily trading volume is above USD 462.87 million, its market capitalization is about USD 16.09 billion, according to CoinGecko.

Investors should research ADA or any other crypto assets before buying it to know its all-time high, behavior, and possible future price. That will help them find the most convenient investment opportunity to avoid the risk of losing money. It is only a matter of time before seeing where the price of this growing crypto asset will head next.

By Alexander Salazar

Gensler stated that cryptocurrency investors anticipate gains based on the efforts of others, referring to the results of the Howey test. The debates on the long-awaited Merge did not trigger the price action of Ether, which has recently lost its value.

The value of the Ethereum native token Ether (ETH) struggles to break through crucial levels despite the Merge. Meanwhile, a comment from Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), sparked off a new debate.

According to the Wall Street Journal, Gensler talked about cryptocurrencies and the intermediaries that allegedly allow investors to stake their coins. He reportedly said they could meet a criterion that courts use when deciding whether an asset is a security.

The Chairman of the SEC Continues Supporting the Security Narrative

Following a congressional hearing, Gensler stated that cryptocurrency investors anticipate gains based on the efforts of others, referring to the Howey test.

Staking on Ethereum includes depositing 32 ETH to activate the validation software. The Shanghai upgrade scheduled for 6 to 12 months after the Merge is an essential step toward freeing ETH on staking.

After the Merge, staked and newly produced ETH will remain blocked on the Beacon chain until the activation of the Shanghai upgrade. According to Gensler, staking looks quite similar to lending, although it has some labeling changes.

Federal regulators had already singled out crypto firms like Coinbase, Circle, Gemini, Nexo, and Celsius for their profitable products, generating a discussion on unregistered stocks.

However, cryptocurrency supporters have criticized the SEC, highlighting its compliance settlement strategy and lack of regulatory advice.

The Long-Awaited Merge Did Not Trigger the Value of Ether

The debate on regulatory staking is not the only discussion about the Ethereum Merge. The long-awaited review did not trigger the price action of Ether, which has recently lost nearly 9% of its value.

With a 24-hour range between USD 1,454 and USD 1,641, the second-largest cryptocurrency by market capitalization remains 70% below its high of around USD 4,870.

According to current market data, only 52% of ETH holders still earn a profit. That indicates that only 1% of the owners are in balance while 47% are broke. Despite weak price action, equity and on-chain signals lean toward a bullish market.

The capitalization of the overall crypto market has also dropped by almost USD 1 trillion as Bitcoin trades below USD 20,000.

Miners Turn to Ethereum Classic and Other Altcoins after the Merge

The transition to PoS has also forced miners to turn to Ravencoin and Ethereum Classic, among other options. Data from CryptoCompare show the hash rate of Ethereum Classic has increased by 240%, while Ravencoin has risen by 51%.

The PoW ranking of CoinMarketCap indicates that Dogecoin (DOGE) is below Bitcoin (BTC) as the pioneering cryptocurrency.

Meanwhile, Ether is trading at around USD 1,467 and has accumulated a 7.4% loss over the last 24 hours. While its daily trading volume is above USD 17.96 billion, its market capitalization is about USD 176.25 billion, according to CoinGecko.

By Alexander Salazar