Weekly report: El Salvador’s Bitcoin adoption becomes official

The cryptocurrency market was rife with activity this week as adoption continued despite a sudden price crash

El Salvador’s Bitcoin adoption is now official

It is official! Bitcoin is now legal tender in El Salvador. The leading cryptocurrency made headlines earlier this week after becoming the first digital currency in the world to become legal tender in a country. The El Salvador parliament adopted the bill to make Bitcoin legal tender in June, and now the bill has come into effect. Thanks to this latest development, businesses and companies operating in the country have to accept BTC as a means of payment from their clients. 

An executive at Fidelity Investments believes that Bitcoin will now be tested as a medium of exchange after El Salvador’s adoption Jurrien Timmer told CNBC that Bitcoin was previously considered as an asset, but its importance as a medium of exchange will now be tested. 

The El Salvador government is doing more on its side to promote the use of cryptocurrencies. The government bought 200 bitcoins, and the president said they intend to buy more over the coming months. President Nayib Bukele is a big believer in Bitcoin and is making big moves that could pay off for the Central American country in the long run.

Cryptocurrency market shed over $300 billion in 24 hours, Solana reaches a new all-time high

El Salvador’s adoption of Bitcoin coincided with a big crash in the cryptocurrency’s price earlier this week. The broader crypto market lost more than $300 billion within 24 hours after the prices of most cryptocurrencies dropped by more than 10%. Bitcoin dropped from a high of $52,000 per coin to trade below the $45,000 region. Ether also dropped from the $3,800 zone to trade at $3,300 per coin, cutting its move towards the $4,000 region. The decline caused the total cryptocurrency market cap to drop from $2.3 trillion to $2 trillion within the space of 24 hours.

Despite the broader cryptocurrency market experiencing a rapid decline, Solana was shining. The cryptocurrency was rallying while the other major cryptocurrencies embarked on a bearish run. As a result, Solana (SOL) hit a new all-time high above $200. The cryptocurrency’s value is now up by more than 150% over the past two months, making it one of the best performing cryptocurrencies in the world at the moment. Furthermore, Solana overtook Polkadot, XRP and Dogecoin to become the sixth-largest cryptocurrency by market cap. If its rally continues, Solana could surpass USDT and take the fifth spot in the market.

Panama and Ukraine are becoming cryptocurrency positive

Some market experts believe that El Salvador’s adoption of Bitcoin could spur other countries to legalise cryptocurrencies. This week saw two countries take giant steps towards doing that. Ukraine adopted a draft bill on virtual assets, effectively recognising cryptocurrencies as an asset class in the country. The new law will allow companies to launch cryptocurrency trading platforms and will allow citizens to pay and accept payments in cryptos such as BTC and ETH. Ukraine’s legislation is based on the current standards put in place by the Financial Action Task Force on Money Laundering (FATF). The law will also allow banks to open accounts for cryptocurrency companies and provide financial services to them.

Panama is another country that is looking to legalise cryptocurrency payments. Panamanian Congressman Gabriel Silva has introduced a bill that would seek to regulate cryptocurrencies and would make BTC and ETH payments legal in the country. The adoption of cryptocurrencies in Panama is expected to create thousands of jobs and boost transparency within the government.

More financial institutions launch cryptocurrency products

The adoption of cryptocurrencies went beyond countries this week, with financial institutions continuing their recent trend of rolling out crypto investment products. BBVA Swiss, the Switzerland arm of Spanish banking giant BBVA, announced the launch of a new digital account earlier this week. The account is designed to enable its customers to invest in a wide range of sectors with the greatest impact on the future, including cryptocurrencies. The new account type would allow users to invest thousands of dollars into cryptocurrencies. BBVA Swiss customers can buy, store, sell and track Bitcoin via its mobile app. The bank said the account is designed for people interested in investing in the traditional financial markets such as stocks and the digital economy like cryptocurrencies.

Robinhood has experienced over 4,000% growth in its cryptocurrency revenue over the past year and has decided to expand its presence in the market. The brokerage platform launched a new service that allows its customers to automatically invest in cryptos on a recurring basis. Users can set how much they want to invest in cryptocurrencies and at what intervals. It can be daily, weekly, bi-weekly or monthly. According to Robinhood, the new product will allow users to steadily build their crypto portfolio and avoid market volatility.

German asset manager Union Investment also became the latest hedge fund to seek exposure to Bitcoin. The firm, with over $500 billion in assets under management, told Bloomberg earlier this week that it intends to invest at least 2% of its total portfolio in Bitcoin. The investment will be spread across its numerous funds, and its clients will gain exposure to cryptocurrencies via those funds. Union Investment revealed that the service would be available to its private investors for now.

Mastercard expands its crypto presence with CipherTrace acquisition

Payment giants such as Visa and Mastercard have been expanding their presence in the cryptocurrency space in recent months. This week, Mastercard went a step further with the acquisition of blockchain analytics startup CipherTrace. According to Mastercard, the acquisition will allow it to expand its offerings in the crypto space and provide services to companies and organisations operating in the sector. Mastercard will launch products that will help companies to accelerate and expand their cryptocurrency-related strategies and investments.