AGL 8.30 Decreased By ▼ -0.03 (-0.36%)
ANL 10.95 Increased By ▲ 0.25 (2.34%)
AVN 79.70 Increased By ▲ 1.51 (1.93%)
BOP 5.75 Increased By ▲ 0.18 (3.23%)
CNERGY 5.64 Increased By ▲ 0.26 (4.83%)
EFERT 79.36 Increased By ▲ 0.71 (0.9%)
EPCL 67.48 Decreased By ▼ -0.31 (-0.46%)
FCCL 14.89 Increased By ▲ 0.39 (2.69%)
FFL 6.70 Increased By ▲ 0.10 (1.52%)
FLYNG 7.16 Increased By ▲ 0.13 (1.85%)
GGGL 11.60 Increased By ▲ 0.26 (2.29%)
GGL 17.51 Increased By ▲ 0.27 (1.57%)
GTECH 8.35 Increased By ▲ 0.05 (0.6%)
HUMNL 7.17 Increased By ▲ 0.11 (1.56%)
KEL 3.14 Increased By ▲ 0.06 (1.95%)
LOTCHEM 35.20 Increased By ▲ 2.33 (7.09%)
MLCF 28.35 Increased By ▲ 0.05 (0.18%)
OGDC 87.70 Increased By ▲ 3.15 (3.73%)
PAEL 16.63 Increased By ▲ 0.18 (1.09%)
PIBTL 6.05 Increased By ▲ 0.20 (3.42%)
PRL 19.46 Increased By ▲ 1.34 (7.4%)
SILK 1.14 No Change ▼ 0.00 (0%)
TELE 11.41 Increased By ▲ 0.31 (2.79%)
TPL 9.20 Increased By ▲ 0.20 (2.22%)
TPLP 20.25 Increased By ▲ 0.37 (1.86%)
TREET 27.10 Increased By ▲ 0.48 (1.8%)
TRG 96.20 Increased By ▲ 1.70 (1.8%)
UNITY 20.85 Increased By ▲ 0.48 (2.36%)
WAVES 13.90 Increased By ▲ 0.27 (1.98%)
WTL 1.34 Increased By ▲ 0.03 (2.29%)
BR100 4,275 Increased By 67 (1.59%)
BR30 15,794 Increased By 348.3 (2.26%)
KSE100 42,872 Increased By 628.4 (1.49%)
KSE30 16,219 Increased By 247.6 (1.55%)
Markets

Bitcoin trading subdued after chaotic debut, Coinbase faces lawsuit

  • Coinbase says it would delay the launch until at least October. Shares of Coinbase last traded down 3.50% at $257.43
Published September 8, 2021

NEW YORK: Volatility in bitcoin eased on Wednesday, a day after El Salvador adopted the crypto asset as legal tender, but the threat of a US lawsuit against crypto exchange Coinbase Global Inc underscored the rocky road ahead for cryptocurrencies.

The Securities and Exchange Commission issued Coinbase with a Wells notice, indicating the US regulator will sue if the crypto exchange goes ahead with the launch of its interest-bearing "Lend" product for crypto assets.

Coinbase said it would delay the launch until at least October. Shares of Coinbase last traded down 3.50% at $257.43.

Trading in bitcoin was subdued after suffering its heaviest losses in 2-1/2 months on Tuesday, when it hit a near four-month high of $52,956 before ending the day down 11.1%, its largest plunge since June 2.

Dollar gains as yields hold near recent highs before ECB meeting

At one point on Tuesday, the digital currency fell as much as 18.6%, wiping out more than $180 billion in market value.

Bitcoin traded down 1.36% at $46,165.00.

Tuesday was a historical day for bitcoin as El Salvador's decision to make the digital currency legal tender got off to a bumpy start.

Technological glitches hampered its use while street protests by mistrustful citizens broke out in the Central American country.

As bitcoin wobbled, Salvadoran President Nayib Bukele said his government purchased an additional 150 bitcoins on Tuesday, worth around $7 million.

"That has underscored the difficulty in trying to protect the value of bitcoin as its own currency," said Nana Otsuki, chief economist at Monex Securities. "The buying didn't seem to be effective in halting its fall."

Analysts said the move by El Salvador showed crypto currencies are here to stay but like any innovation, will suffer birthing pains as the currency's volatility must be resolved.

Bitcoin has been pitched to a largely unbanked population in El Salvador as an effective savings vehicle and a store of value for users, said Ganesh Viswanath-Natraj, assistant professor of finance at Warwick Business School in Britain.

Oil climbs on low US output, disruptions in Libyan ports

"High volatility in a medium of exchange corresponds to high volatility in the macroeconomy. Users who hold bitcoin will now see wild swings in their savings," Viswanath-Natraj said.

The trading frenzy on Tuesday saw US cryptocurrency exchanges Kraken, Gemini and Coinbase struggle with delays in some transactions. All said their systems have since been restored.

Coinbase is not the only cryptocurrency platform to come under regulatory scrutiny. Several states have cracked down on BlockFi.

Comments

Comments are closed.