South Korea Sways Cryptocurrency Prices - But How?

Audrey Hill
January 18, 2018

And it wasn't just the value of Bitcoin that was affected either; the value of other major cryptocurrencies such as Ethereum, Ripple, and Litecoin also suffered from the drop, while other less popular cryptocurrencies saw their values lose half their value. It climbed to a record $19,511 last month.

Around 5:00 on Wednesday, the price of bitcoin has fallen to 9,730.42 dollars for a bitcoin, its lowest level since December 1 and a fall of almost 50% since its historic peak of December 18, according to figures compiled by the Bloomberg financial data provider.

South Korea is home to some of the biggest bitcoin exchange platforms and a ban there would disastrous for the Bitcoin infrastructure.

Why has bitcoin's price fallen?

This is its largest slump since early December, according to CoinDesk's Bitcoin Price Index (BPI).

The value of the Bitcoin crypto-currency has fallen nearly 50% from its December peak.

China and Germany have also indicated they are preparing crackdowns on digital currencies, The Daily Telegraph reports. It was trading at over $1,300 just a few days ago.

More news: Shock and horror: Ferrari plans an electric supercar
More news: Vulgarity used by president projected onto Trump Hotel in DC
More news: Proposed US bill forbids government contractors from using Huawei, ZTE tech

The plunge occurred after the South Korean government said it was considering banning the trading of cryptocurrencies.

Bitcoin, and cryptocurrencies in general, are in the middle of a huge crash that has many people selling off their currencies en masse - further tanking the market.

He added that shutting down digital currency exchanges is "a live option but government ministries need to very seriously review it".

Despite Bitcoin's surge, sceptics say it a classic speculative bubble with no relation to real financial market activity or the economy.

"Market jitters over South Korea potentially banning cryptocurrency trading has effectively eroded investor appetite for bitcoin", said Lukman Otunuga, research analyst at FXTM. "Although it will take time, there are levers being pulled that will gradually squeeze cryptocurrencies and the investment case behind them".

Bitcoin and the other virtual currencies have seen near unprecedented growth over the past couple of years, but getting that big can come with some consequences.

Bitcoin and other digital currencies trade on private exchanges that have little regulation or protection for investors.

Other reports by MaliBehiribAe

Discuss This Article