From midnight UK time Bitcoin fell in value from $37,349 to $35,063 at 5.50 am a 6.1percent 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 $0.300 at 9.30 pm to $0.303 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.
If Salvadorans begin using bitcoin to send remittances home from abroad it has the potential to see almost $6bn per year being converted into the world’s preeminent cryptocurrency.
According to the World Bank, the nation has one of the highest GDP to remittance rations in the world.
In another tweet, the Salvadoran president said: “It will bring financial inclusion, investment, tourism, innovation, and economic development for our country.
“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,” Bukele said.