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  • El Salvador approves new bill to comply with IMF deal

    El Salvador approves new bill to comply with IMF deal

    • The reform passed with 55 votes, with only two against
    • El Salvador became the first country to accept Bitcoin as legal tender in 2021
    • In December, El Salvador announced it was changing its Bitcoin law to secure a $1.3bn loan from the IMF

    El Salvador’s Congress has approved a bill to change its Bitcoin law to comply with a deal it struck with the International Monetary Fund (IMF).

    On January 29, Reuters reported that the bill was approved minutes after President Nayib Bukele sent it.

    The reform passed with 55 votes, with only two against. Under El Salvador’s Bitcoin law, it required businesses to accept Bitcoin if they were able to do so. Ruling party lawmaker Elisa Rosales said it was required to ensure Bitcoin’s “permanence as legal tender” while facilitating its “practical implementation.”

    Legal tender

    El Salvador became the first country to accept Bitcoin as legal tender in 2021. At the time, it was reported that all businesses must accept Bitcoin. The move soon attracted the attention of the IMF.

    Following El Salvador’s adoption of Bitcoin in 2021, the IMF sent a statement in November 2021 “recommend[ing] narrowing the scope of the Bitcoin law” while “strengthening the regulation and supervision of the new payment system.”

    This was again called for in January 2022, when the IMF advised El Salvador to reconsider its decision to make Bitcoin the country’s legal tender. More recently, the IMF recommended that El Salvador limit the public’s exposure to Bitcoin.

    New deal

    In December, El Salvador changed its Bitcoin plans to secure a $1.3 billion loan from the IMF.

    Under the plans, El Salvador would change a legal requirement making businesses accept Bitcoin as payment, making it optional instead. The government would also reduce the budget deficit by 3.5% of GDP over three years through spending cuts and tax rises while boosting reserves from $11 billion to $15 billion.

    The deal is also expected to unlock a further $1 billion in lending from the World Bank and $1 billion from the Inter-American Development Bank over the next few years.

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  • El Salvador to ‘confine’ its Bitcoin activities in $1.4bn loan deal with the IMF

    El Salvador to ‘confine’ its Bitcoin activities in $1.4bn loan deal with the IMF

    • The IMF said “potential risks” of El Salvador’s Bitcoin project will be “diminished significantly”
    • A Bitcoin podcaster questioned the true cost of the IMF’s monetary assistance to El Salvador
    • El Salvador will receive additional funding from other major banks in a financial package totaling over $3.5 billion

    El Salvador will receive a $1.4 billion loan from the International Monetary Fund (IMF) over the next 40 months as it “confines” its Bitcoin-related activities.

    The IMF is to loan the amount to the Central American country under the Extended Fund Facility (EFF) so it can support the government’s economic reforms.

    “The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies,” the IMF said in a statement.

    The IMF said that acceptance of Bitcoin by the private sector will be made voluntary while engagement in “Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined.”

    Taxes will only be paid in US dollars, the IMF noted, adding that El Salvador’s government participation in its Chivo crypto wallet “will be gradually unwound.”

    “Transparency, regulation, and supervision of digital assets will be enhanced to safeguard financial stability, consumer and investor protection, and financial integrity,” the IMF said.

    Juan, a Bitcoin podcaster, said on X that it’s like “watching a chess game where every move is calculated for economic recovery,” adding “yet it also raises questions about the true cost of such ‘assistance.’”

    Changing plans

    Earlier this month, it was reported that El Salvador was reducing its Bitcoin ambitious to secure the IMF loan.

    As well as making the acceptance of Bitcoin voluntary, the government would also reduce its budget deficit by 3.5% of GDP over three years through spending cuts and tax rises while boosting reserves from $11 billion to $15 billion.

    El Salvador is expected to receive additional funding support from the World Bank, the Inter-American Development Bank, and other regional development banks. In total, the overall financial package will reach over $3.5 billion.

    El Salvador began accepting Bitcoin as legal tender in 2021, making it the first to do so.

    Following El Salvador’s adoption, the IMF sent a statement in November 2021 “recommend[ing] narrowing the scope of the Bitcoin law” while “strengthening the regulation and supervision of the new payment system.”

    This was again called for in January 2022 when the IMF advised El Salvador to reconsider its decision on Bitcoin as the country’s legal tender. More recently, the IMF recommended El Salvador limit the public’s exposure to Bitcoin.

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  • LTC, ARB and MATIC price outlook amid US debt limit deal

    LTC, ARB and MATIC price outlook amid US debt limit deal

    • LTC bulls need to break above $93, a key hurdle below the psychological level of $100.
    • MATIC must reclaim $1 to target the $1.30-$1.50 range, or risk dip to $0.75.
    • Elsewhere, ARB is near a key resistance level as Arbitrum price jumps 3.9% amid the market’s reaction to US debt ceiling news.

    The US has reached a “tentative deal” on its debt limit crisis after a week of high uncertainty. With the news of the deal seeping through the markets, cryptocurrencies reacted slightly positively as Bitcoin and Ethereum prices rose above $27k and $1.8k respectively.

    The outlook was also visible across the top 10 altcoin market, with sentiment relief showing as Litecoin (LTC), Arbitrum (ARB), and Polygon (MATIC) moved up. Even then, markets remain largely weak as May comes to a close.

    Here is what a respected crypto analyst has predicted for LTC, ARB and MATIC.

    Litecoin price prediction: $93 key to LTC bulls

    In March, LTC creator Charlie Lee offered a huge Litecoin price prediction. Pointing to the 14th ranked cryptocurrency (by market cap today), Lee said Litecoin price could rise to 0.0125 BTC in a new bull cycle. He also believed a downside for LTC could find support at 0.0025 BTC.

    The current LTC price is above this latter level as it trades near $89.40 or 0.0032 against bitcoin. In recent weeks, analysts have pointed to Litecoin’s upcoming halving as a likely trigger for fresh upside momentum.

    According to crypto analyst Michael van de Poppe, bulls need to break above a key resistance at $93 on the higher timeframe. The psychological $100 level would then be in sight as buyers eye a halving rally, he tweeted. 

    “Many squigglies on this chart, but higher timeframe resistance is at $93. Currently, support found at $82 and a strong bounce -> weekly candle looks good. Next week breaking through $93 and the Halving rally might start.”

    Polygon price prediction: MATIC needs to break above $1 again

    MATIC has traded lower since March, with an attempt to flip higher running into rejection in April as price fell below $1.00 (CoinJournal highlighted the subsequent price movement here). Although it remains below the dollar, bulls might have the upper hand if they reclaim control above $0.95.

    Currently, MATIC/USD is around $0.92. According to van de Poppe, MATIC has bounced well above this key area since its NFT announcement during the F1 Monaco GP. Can bulls build momentum from here?

    “I really want to see it flip $0.95, then we can accelerate towards $1.30-1.50. If that’s not the case, then short is activated and longs can be taken at $0.75,” the analyst said in reply to one of the requests for altcoin analysis.

    Arbitrum price prediction: ARB is near key resistance

    Arbitrum, which was trading at $1.20 and 3.9% up in the past 24 hours at the time of writing, needs to hold above the $1.18 level to give bulls an upside boost. That could aid momentum to $1.30, van de Poppe noted.

    “Again, into resistance. This means, entries are available at $1.10. If it doesn’t clearly break & flip the resistance at $1.18, I’d assume shorts are triggered when falling back sub $1.18. Otherwise, long continuation trade towards $1.30.”

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  • China’s state TV crypto broadcast “big deal”, Binance CEO says

    China’s state TV crypto broadcast “big deal”, Binance CEO says

    • Binance CEO Changpeng Zhao says China’s state TV crypto broadcast is “a big deal.” 
    • He notes that previous coverage has historically been bullish for crypto.
    • His comments come as Bitcoin price struggled to stay above $26k on Wednesday.

    Binance CEO Changpeng Zhao, popularly known as CZ, says China broadcasting a crypto segment on state broadcaster China Central Television is “a big deal” and that such broadcasts have previously coincided with a subsequent uptick in crypto prices.

    According to CZ, the broadcast has “Chinese speaking communities buzzing,” given how such coverage of Bitcoin have ended with crypto price rallying.

    “It’s a big deal. The Chinese speaking communities are buzzing,” he tweeted on Wednesday. “Historically, coverages like these led to bull runs.”

    He however, noted that his comments do not mean that the “past predicts the future.” The Binance CEO, who is one of the biggest crypto proponents in the world, added a disclaimer that his remarks did not constitute financial advice.

    Bitcoin features in Chinese TV broadcast

    The referenced broadcast shows a Bitcoin ATM in the increasingly crypto-friendly Hong Kong. The crypto teller machine also shows a bitcoin logo and a “Buy Bitcoins” inscription. The TV segment also featured commentary on NFTs.

    But it should be remembered that China banned bitcoin (again) in 2021.

    As highlighted here on Tuesday, Bitcoin price rose briefly to touch the $27,500 resistance area as Hong Kong announced retail investors would from 1 June be able to buy and trade bitcoin and Ethereum on regulated exchanges.

    Experts hailed Hong Kong’s Securities and Futures Commission (SFC)’s announcement as a potential game changer for crypto adoption. The framework comes as Hong Kong looks to position itself as a leading crypto and blockchain hub, while at the same time offering guidelines and rules that target greater protection for consumers.

    Bitcoin has not had a major reaction to the latest China related news, and was struggling to remain above $26k as at 1:50 pm ET on Wednesday. According to data from CoinGecko, BTC was perched at $26,300, down 3.2% in the past 24 hours. 

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