{"id":5963,"date":"2021-07-11T21:14:22","date_gmt":"2021-07-11T20:14:22","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=5963"},"modified":"2021-07-12T00:45:10","modified_gmt":"2021-07-11T23:45:10","slug":"el-salvadors-bitcoin-move-could-pose-a-challenge-for-the-cryptocurrency-jpmorgan","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/el-salvadors-bitcoin-move-could-pose-a-challenge-for-the-cryptocurrency-jpmorgan\/","title":{"rendered":"El Salvador’s Bitcoin move could pose a challenge for the cryptocurrency – JPMorgan"},"content":{"rendered":"\n
According to analysts from JPMorgan<\/a>, the adoption of Bitcoin by El Salvador, might not be the best decision stating the issues of price volatility and also hesitation of the policy by the populace.<\/h5>\n\n\n\n
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According to a team from JPMorgan Chase & Co., El Salvador's proclamation of Bitcoin as legal tender could pose issues for both the country and the cryptocurrency.<\/p>\n\n\n\n

Bitcoin trade volumes typically reach $40 billion to $50 billion per day, but the majority of that is internalized by big exchanges, according to a JPMorgan analysis released on Thursday by Steve Palacio, Joshua Younger, and Veronica Mejia Bustamante.<\/p>\n\n\n\n

A major percentage of Bitcoin is stored in illiquid entities, with more than 90% of it not changing hands in more than a year with a \u201csignificant and growing fraction held by wallets with low turnover,\u201d they added.<\/p>\n\n\n\n

According to the report, daily payment activity in El Salvador would account for 4% of recent on-chain transaction volume and more than 1% of the total value of tokens transferred between wallets in the previous year, with the illiquidity and nature of the volume \u201cpotentially a significant limitation on its potential as a medium of exchange\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>.\u201d<\/p>\n\n\n\n

El Salvador's President Nayib Bukele's desire to make Bitcoin legal cash has sparked a flurry of debate about whether it's a good idea and what the consequences might be.<\/p>\n\n\n\n

Bukele, who is 39 years old, believes that Bitcoin would assist the country to overcome its low banking penetration rate and reduce the cost of sending remittances.<\/p>\n\n\n\n

However, the International Monetary Fund, which is now in talks with El Salvador regarding its lending program, is one of those who have questioned such logic.<\/p>\n\n\n\n

Even many Bitcoin supporters admit that, while it may be argued that Bitcoin is a decent store of value, its utility as a payment system is limited.<\/p>\n\n\n\n

\u201cBitcoin is the most inefficient payment method ever devised. In a recent video interview, William Quigley, co-founder of stablecoin<\/a> Tether and a pioneer in numerous parts of the cryptocurrency sector, remarked, “It's bad.”<\/p>\n\n\n\n

\u201cAlmost any token is a superior payment method than Bitcoin.\u201d<\/p>\n\n\n\n

Other obstacles to El Salvador's use of Bitcoin as legal tender, according to JPMorgan:<\/p>\n\n\n\n