South Korea’s government is preparing a bill to ban bitcoin trading, it announced on Thursday, and the news sent every major cryptocurrency plummeting.
“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Justice minister Park Sang-ki said at a press conference, according to Reuters.
South Korea is one of the world’s largest markets for cryptocurrency activity, and this week officials raided the offices of two of the country’s largest bitcoin exchanges, Coinone and Bithumb.
Just before markets opened in New York on Thursday morning, the crypto market was seeing red across the board. Bitcoin, ether, ripple, bitcoin cash, and litecoin all fell by between 5% and 12%.
But there’s more to this story: South Korea is just the latest country to indicate a strong stance, either positive or negative, toward trading of cryptocurrencies.
China banned initial coin offerings (ICOs) back in September of last year, and South Korea soon followed suit. The next month, China shut down all Chinese bitcoin exchange sites, and now there are reports that China would like to shut down mainland bitcoin mining operations next.
On the other hand, last April Japan officially recognized bitcoin as legal currency and will regulate it accordingly, which quickly boosted trading volume on Japanese exchanges and has helped make Japan the new No. 1 by daily trading activity. One month after Japan’s move, in May 2017, Australia followed suit in recognizing bitcoin as legal currency.
What we are seeing, then, is that as the bitcoin and overall cryptocurrency market matures and heats up, even with its price ebbs and flows, countries with hot activity are setting more policy. In other words: regulation is coming.
In some cases, a country’s new stance or announcement regarding crypto doesn’t move the needle much in one way or the other in terms of price. (For example, when the SEC has twice issued public guidance warning about ICOs.)
In the case of South Korea, this week’s news had an instant impact and caused a rout. As long as the story continues to dominate the crypto news cycle, losses may continue. This may even prove to be the start of the big crash some bitcoin bears have warned about.
But given the volatility of the daily moves, and the resilience of this market even after bad news, it’s possible (likely, some might argue) that within another 24 hours, the top coins will regain their losses.
Read more at:
https://finance.yahoo.com/news/south-korea-cryptocurrency-rout-part-larger-trend-government-crypto-policy-230727083.html
