CRYPTOCURRENCY markets have experienced an overnight slump affecting the price of major players such as Bitcoin, Ethereum, and Dogecoin.
From midnight to 5.50 am UK time, Bitcoin fell in value from $37,349 to $35,063 – a 6.1 percent drop, with a slump in the price of Ethereum and Dogecoin also being experienced. Dogecoin saw a drop of 7.8 percent after the price of the memecoin fell from $0.303 at 9.30 pm to $0.300 at 5.50 am. Ethereum fell 3.7 percent between midnight and 2.30 am, before recovering slightly.
The price of Ethereum now sits at $2,298.
The price of cryptocurrencies soared in value this week after El Salvador deemed bitcoin legal tender.
However, the current u-turn in price valuation could be due to a recent statement by the central bank regulatory authority, the Basel Committee on Banking Supervision.
Many banking groups are planning to gain exposure to cryptocurrency assets, such as bitcoin.
The Basel Committee on Banking Supervision supervisory group has advised these banks to set aside enough capital to cover losses on any bitcoin holdings.
The regulator’s advice about crypto-asset exposures would make it very expensive for banks to hold digital currencies.
This in turn could hinder a wider market acceptance of crypto-assets such as bitcoin.
One proposal made by the regulatory body is to attach a 1,250 percent risk to a bank’s exposure to bitcoins and certain other cryptos such as Ethereum.
The price of bitcoin shot up earlier this week after President Bukele of El Salvador proposed a bill to make the central American nation the first in the world to make bitcoin legal tender.
In the nation’s legislature, a majority of 62 out of 84 lawmakers approved the revolutionary new bill.
On June 9 President Nayib Bukele tweeted: “The Bitcoin Law has just been approved by a qualified majority.”
President Bukele has said that bitcoin has the potential to help Salvadoran ex-pats send remittances back home.