How South Korea Turns Bitcoin Below $10,000
Bad news for Bitcoin whales. Bitcoin dropped below $10,000, and it’s now worth just over half of its peak value. The falling prices have been serious enough to make people think of suicide and prompt online posts with suicide hotlines for virtual currency investors in despair. Other popular cryptocurrencies Ethereum, Ripple, Litecoin also have posted double-digit losses between 30 to 40 percent. One virtual currency exchange, Bitconnect, dived 93% late Monday.
Bitcoin had a stellar year in 2017, starting at around $800 and steadily gaining value, before touching an all-time high of $19,783 on December 17th. For skeptics of virtual currencies, the falling prices have provided some vindication. As a note from economist at Capital Economics said:
“Most people are buying Bitcoin, not because of a belief in its future as a global currency, but because they expect it to rise in value,”
“Accordingly, it has all the hallmarks of a classic speculative bubble, which we expect to burst.”
It’s unclear why bitcoin has had a rough week. The pessimism in recent days has been fed by several reports that governments around the world were planning to tighten the reins on virtual currency trading. Such as China that were stepping-up measures to limit cryptocurrency trading, which is already banned on exchanges, and Russia is toying with a similar idea. But the impact will not as much as if South Korea applied the same regulation.
Reports of South Korean regulators cracking down on exchanges shook the entire digital currency market. As the third-biggest market in the world for Bitcoin trades, behind Japan and the US, the Korea Blockchain Industry Association estimates that South Korea has more than a dozen cryptocurrency exchanges. And there’s so much demand that the virtual currency has traded at as much as a 30% premium compared with other countries.
South Korea banned opening anonymous virtual currency accounts and put in place new laws giving authorities power to shut down digital currency exchanges. Officials are currently weighing halting trading on exchanges. Earlier on Tuesday, Finance Minister Kim Dong-yeon reiterated that a ban on crypto trading is still very much a “live option”.
With so many South Koreans keen to fulfil their financial hopes and dreams through cryptocurrency trades, there is resistance to plans for a crypto-clampdown. More than 200,000 people have now signed a petition on President Moon Jae-in’s official website asking that the “happy dreams” of Bitcoin traders in South Korea can remain in place.
South Korea’s government has made a commitment to answer such petitions that reach more than 200,000 signatures within 30 days.