The US Securities and Exchange Commission leader has weighed in on the Lummis and Gillibrand policy because it would undermine investor protections.

Crypto investors constantly observe with concern and fear how the prices of cryptocurrencies keep crumbling down in the market and start to wonder how much the crypto will approach and how to deal with the crypto winter. Bitcoin is dancing around USD 20,509, crashing in a single day at least 8.36% and 70% of its maximum price achieved in November 2021.

The president of the SEC, Gary Gensler, highlighted his views on the issue at the summit of The Wall Street Journal network of financial directors, where he reflected on the current situation regarding the subsequent Crashdown in crypto prices.

When asked if the recent drop in crypto prices addressed a new urgency to the SEC fears about the current market panorama, Gensler stated that the problem stands out, but the problem has been there before.

The Crypto Bill Proposed by Lummis

Likewise, the head of the SEC referred to the crypto regulation bill sent by US Senators Cynthia Lummis and Kirsten Gillibrand last week. Gensler said he would prefer to have a conversation with the legislators first but the conversation must get held from his point of view.

The policy, as it stands, would give responsibility for different sectors of the crypto market to many entities and address many other factors, such as generating a tax break for small crypto operations. The concern with a law like this one is that it gives the same mission to other entities while it takes some crypto out of the control of the SEC.

Gensler expressed that most crypto exchanges list hundreds of tokens and that it is unlikely that all of them, 100%, are not securities.

Gensler said they do not plan to expand their jurisdiction, but these tokens got offered to the public, and the public is planning a better future with them. Those are the standard features of a typical investment contract.

The positive aspect of the bill is that the document would grant the required regulatory clarity on factors linked to digital assets for its subsequent approval in the United States Senate.

That is what says Michael Saylor, the billionaire businessman who owns MicroStrategy, the company that currently has more than 127,000 bitcoins in its balance.

According to the CEO of Microstrategy, there is no doubt that the bill “will receive many benefits from regulatory clarity that will make easy and boost the participation of traditional banks, public entities, and institutional investors. This improvement would make the entire digital asset industry grow exponentially.

By: Jenson Nuñez

El Salvador’s national bitcoin reserves fell more than 47%. Some Salvadorans are worried about how the administration will deal with the losses.

The potent Crashdown in the cost of bitcoin (BTC) to USD 20,800, its lowest in 18 months, increased the concerns of various Salvadoran citizens. Through Twitter, many inhabitants raised their voices against President Nayib Bukele for using part of the national reserves to purchase digital assets.

According to this panorama, the Salvadoran journalist born in Spain, Roberto Valencia, expressed that it is hard to imagine how those who acquired bitcoin must feel when it was at USD 60,000 seven months ago, and now it fell below USD 30.000.

Along with this message, the journalist revealed a tweet from President Nayib Bukele from October of last year highlighting that they had acquired bitcoin on the dip (the fall). The digital currency danced near its historical maximum at USD 67,800, for which such a decision made the administration lose a lot of money.

El Salvador Lost at Least 47% of the National Reserves

El Salvador counts on 2,301 bitcoins registered at $44,189, according to SalvadorTracker. That means the Salvadoran administration has invested $101,678,889 in cryptocurrency and is currently facing considerable losses.

With BTC crumbling to $20,800, the Salvadoran reserves in Bitcoin run parallel to $47,860,800. El Salvador is facing an unprecedented loss of USD 53,818,089 in bitcoin, which implies that they have lost 47% of its previous investment.

Although other sources determine that the average price of bitcoins that El Salvador holdings is USD 47,434. For this reason, they maintain that the unrealized losses are now more prominent, above 50%.

However, it is worth clarifying that El Salvador has not sold its bitcoin reserves and plans to hold them in the future. If the price of BTC reaches a higher peak than what they used to acquire the currency, their funds will grow. This action is the goal Nayib Bukele is aiming for, who has not commented on the severe fall that the cryptocurrency is facing this week.

Bitcoin Crash Increases Uncertainty about the Strategies Intended for El Salvador

Another person who expressed her concerns with the move to acquire bitcoin was the political scientist Ines Martínez, president of the NGO D’Politic of El Salvador, which sides with democracy, human rights, and the active participation of citizens in the political environment.

She said he promised 50 schools with the profits from bitcoin, but all he did was lose more than USD 50 million to date funds from the Salvadoran citizens.

On the other hand, the current bitcoin bear market still creates an uncertain atmosphere in the crypto space and the Salvadoran population because they would not know how the government will face the public expenses that would attack the economy. In addition, the investment that they expected to gain with the issuance of the volcano funds got stopped until the price of the digital asset balances.

By: Jenson Nuñez

If the Bitcoin price falls below $16,800, loan guarantees to Celsius will get liquidated. To avoid this situation, the company took another $530 million loan and employed it as collateral.

Due to the crude market in the crypto sector, with bitcoin (BTC) dancing at around $22,000, Celsius has decided to take precarious measures. To prevent its collateral deposited in other protocols from getting liquidated, the entity behind the lending and investment platform has deposited more wrapped bitcoin (wBTC) to add as collateral.

The plan of collateralizing bitcoin in MakerDAO (or in wBTC, a “wrapped” token of the most prominent digital asset) got repeated in recent days by Celsius. Between June 12 and 14, it attached a sum registered at 7,165 wBTC in the investment and loan protocol that permits the stable coin DAI (DAI).

One particular feature of Celsius is that its business model focuses on employing the deposits of its users in other investments, such as DeFi protocols and digital assets mining. By not being focused on the traditional scheme of loan networks, a bearish market context like the current one could bargain their solvency.

By attaching more collateral, the company could lower the BTC price that acts as the limit for liquidations from USD 17,211 to USD 16,852. The data about the position can get observed on the defiexplore.com site.

To acquire the funds employed as collateral, Celsius would have requested a loan of 23,962 wBTC from a DeFi investment platform Aave. This information came from Dylan LeClair, a member of the analytics firm UTXO Management, who shared the image of a user interface similar to that of that protocol.

The amount runs in parallel with $530.6 million, based on the wBTC quote. Subtracting the $278.5 million debt in the protocol, Celsius’s current collateral on MakerDao relies on $248.5 million.

Celsius Users’ Bitcoins Face Risks

The main struggle with the situation is that the bitcoins and other digital assets that users have deposited on this platform are at risk. Withdrawals got suspended on Sunday, June 12, as a protective measure in the face of market instability, and now these types of procedures are getting revealed to circumvent bankruptcy.

Furthermore, a liquidation by Celsius could seriously impact the market because USD 522 million equivalent in BTC would get sold, triggering the offer and lowering the digital asset price.

The Bear Market “Wears” Celsius

Until the end of 2021, Celsius achieved a flow of funds so vast that it approached at least USD 28,000 million, according to the protos.com portal. Now, with the cost of bitcoin 30% lower than a week ago at press time, the entity is making significant moves to circumvent insolvency; the funds it managed crumbled by 88% and would dance around USD 3,300 million.

By: Jenson Nuñez