Bitcoin and Ripple prices took a dip on Thursday morning, spiralling down as much as 13 percent on some exchanges.
The hit came after South Korean regulators threatened to curb the trade of cryptocurrencies in Korea.
Minister of Justice Park Sang-ki pledged to investigate some of South Korea’s top financial institutions to seek out those who facilitate the speculative growth of bitcoin.
Bitcoin prices responded to the news by plunging across the markets with Korean exchanges facing the heaviest losses.
According to CoinMarketCap, bitcoin prices tumbled 10 percent at 2.54am GMT from £10.768.42 ($14,579.50) to £9,680.02 ($13,105.90) at 4.54am GMT.
On Coindesk, prices fell a staggering 14 percent from their midnight high of £11,031.00 ($14,932.59) to £9,518.34 ($12,884.91) around 4.21am GMT.
In South Korea, bitcoin trades with a 30 to 42 percent premium when compared to the rest of the world. Some analysts refer to this as the “kimchi premium”.
Mr Park said this trade is considered “abnormal” outside of Korea and has to be stopped.
He said: “Cryptocurrency trading is looking similar to speculation and gambling.”
The Minister also underlined that speculative digital currencies are one of the “great concerns”.
Earlier this week CoinMaketCap appeared to trigger a Ripple crash when it ceased to track Korean exchanges in its valuations.
Ripple’s signature XRP token plummeted as much as 55 percent on its January 4 record price of £2.84 ($3.84) to as low as £1.26 ($1.70) at 8.34am on Wednesday.
CoinMarketCap defended its move by suggesting that the clear differences between Korean exchanges and the rest of the world were unfair to customers.
David Schwartz, chief cryptographer at Ripple, said in a social media post: “CoinMarketCap’s decision to exclude Korean prices from the displayed XRP price made the price appear to drop, likely triggering some panic selling. Look closely at the data and don’t be mislead.”
Later adding: “Prices definitely started falling after CMC made the change. My guess is that the appearance of a sudden drop triggered panic selling and profit taking. But that’s a guess.”
Data collected by BitcoinCharts suggests that the Korean Won is the fourth largest currency to be traded for bitcoin, after the Japanese Yen, US Dollar and Euro.
According to CryptoCompare website, this accounts for about fiver percent of bitcoin’s total trade.
CoinMarketCap lists popular Korean exchange Bithumb as the biggest exchange trading ethereal and Ripple. It is also the 13th biggest bitcoin exchange in the world.
The Korean exchange confirmed on Thursday that Government officials had visited its headquarters pending an investigation.
Bitcoin hit an all-week low on Thursday of £9,489.38 ($12,845.71) on Coindesk, while Ripple bottomed out at £1.20 ($1.62) around 4.30am GMT.
Read more at:
https://www.express.co.uk/finance/city/903570/bitcoin-price-falling-ripple-xrp-btc-south-korea-crypto-exchange
