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Crypto SWOT: Bitcoin officially becomes legal tender in El Salvador, last Tuesday

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Plethori, up 2,775%.

  • Multinational payments giant Visa announced that it is planning to bring cryptocurrency services to traditional banking platforms in Brazil, reports Bitcoin.com. The credit card giant also said it is working with several crypto companies in the country to bring cryptocurrency payment cards to the market and hinted at a possible direct integration of Bitcoin in payments.

  • The Harmony Foundation of the Harmony company, a proof-of-stake blockchain that claims to process transactions in two seconds at a low cost, is allocating more than $300 million in the network's ONE token over a span of four years to attract projects. The initiative aims to support 10,000 startups with bounties, grants, and other scholarships. "We think that Harmony has the right vision for creating wealth together, for having the infrastructure and platform to do it," Harmony founder Stephen Tse told CoinDesk on Thursday.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Didcoin, down 99.93%.

  • Thailand's SEC has temporarily suspended the services of the local branch of crypto exchange Huobi, reports CoinTelegraph, and recommended revoking its operating license with the Ministry of Finance. Huobi received the suspension order after failing to comply with local regulations related to its operations and management structure. With the suspension in place, the crypto exchange has been given three months to return all assets to its clients, the article states.

  • According to CoinTelegraph, reports have emerged that a bug on OpenSea's marketplace has deleted user owned non-fungible tokens (NFTs) valued at 28.44 Ether (ETH), equaling $100,000 USD in cost. Nick Johnson, lead developer of Ethereum Name Service (ENS), relayed the information after reportedly losing an NFT that was linked to the first ENS named rilxxlir.eth. (ENS is a naming system that allows users to store text-based content as an NFT on the Ethereum blockchain).

Opportunities

  • Bitcoin is undergoing the biggest test in its 12-year history, writes Bloomberg, as El Salvador becomes the first country to adopt it as legal tender on Tuesday. Many will be monitoring the experiment to see if a significant number of people want to transact with Bitcoin when it circulates alongside the dollar, the article continues, and whether it brings any benefits to the violent, impoverished Central American nation.

  • Following El Salvador making Bitcoin legal tender, privacy activist and whistleblower Edward Snowden says, "there is now pressure on competing nations to acquire Bitcoin — even if only as a reserve asset." He warned, "Latecomers may regret hesitating." Other countries are expecting to follow in El Salvador's footsteps if adopting Bitcoin as legal tender proves to cause the cost of remittances to drop significantly. If so, according to Dante Mossi, executive president of the Central American Bank for Economic Integration (CABEI), "other countries will probably seek that advantage and adopt [Bitcoin]" as well.

  • Golden State Warriors guard Stephen Curry has been signed as an "FTX global ambassador," reports CoinDesk. Earlier this year, National Football League player Tom Brady and his wife also made a similar deal with FTX. This cryptocurrency derivatives exchange company is looking to seize the opportunity following recent stumbles by competing with Binance and surging interest in crypto trading in the U.S. The partnership with Curry extends FTX's National Basketball Association foray beyond stadium naming rights. "I'm excited to partner with a company that demystifies the crypto space and eliminates the intimidation factor for first-time users," Curry said in a press release.

Threats

  • Before El Salvador's launch of Bitcoin as legal tender on Tuesday, the country bought 400 Bitcoins (valued at $20 million USD), helping to drive the cryptocurrency's price above $52,000 for the first time since May. Unfortunately, hours later, Bitcoin weakened and last traded down 0.51% at $46,561.74 USD, reports Reuters. Some El Salvadorians have taken to the streets in protest of the volatile digital currency, worried for their financial futures with Bitcoin as legal tender given half the country doesn't have access to the necessary technology needed to use it.
  • As reported by Bitcoin.com, 14 suspects allegedly behind a cryptocurrency scam have been arrested in Taiwan. According to the country's Criminal Investigation Bureau (CIB), the scam allegedly defrauded more than 100 people out of about $5.41 million over the past year. On Sunday, the Taipei Times reported that the suspects now face charges of fraud, money laundering, and breaches of the country's Organized Crime Prevention Act.

  • The SEC is threatening to sue Coinbase Global, Inc., a U.S.-based cryptocurrency exchange platform, over its yet-to-be-launched "Lend" program. This program would give users 4% interest on deposits of the stablecoin USDC, with other assets to be added later. Despite ongoing discussions with the SEC, Coinbase was still issued a "Wells Notice," reports CoinDesk on September 7. In a tweet thread on Tuesday, Coinbase CEO Brian Armstrong said his company had complied with all the SEC's requests including providing subpoenaed records and testimony from employees. Unfortunately, this situation has resulted in Coinbase shares sinking, causing the stock ($COIN) to slide 4.1% on Nasdaq to $256.
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