South Korea is considering closing local cryptocurrency exchanges (again)

Saturday, 20 Jan, 2018

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.

The world's most valuable cryptocurrency, bitcoin, lost over half its value since it smashed the $20,000 barrier in mid-December.

"In addition to signals that South Korea and China may ban trading on cryptocurrencies, we have heard comments from Russian leader (Vladimir) Putin that the country will seek to regulate the market more tightly".

Prices of bitcoin, ripple and ethereum plunged earlier this week, with bitcoin dropping under $10,000 yesterday.

Cryptocurrencies continued their sharp tumble on Wednesday as bitcoin dropped by over 16% as continued fears of regulation from Russian Federation and China dent investor confidence.

"You have more regulatory uncertainty ... and because of these falls, you have these other fallouts", he said, referring to the collapse of some cryptocurrencies.

"Cryptocurrency speculation has been irrationally overheated in Korea", the South Korean government said in a statement reported by Bloomberg News.

Jackson, like other cryptocurrency analysts, believes bitcoin's upper limit may still be well above the $20,000 peak it hit in 2017, saying that it could be worth "100-times what it is today".

Bitcoin's peak in January coincided with the launch of Bitcoin futures contracts, a moment that was seen as the digital currency entering the mainstream.

On Wednesday, bitcoin fell as low as US$9,222 on Bitstamp, its lowest price since December 1, as CBOE and CME bitcoin futures tumbled to contract lows.

Fellow cryptocurrency Ethereum also pushed back above $1,000 after succumbing to the dip, while Ripple prices briefly rose above $2 after a tumble-resulting in a 14% net rise on Wednesday.

Finance Minister Kim Dong-yeon said in an interview with local radio station TBS that banning trading in digital currencies was "a live option".

"Whether the animal spirits have already released their grip, remains to be seen and this can not be ascertained from a two-day slump".

The cryptocurrencies market has so far had a rocky start to the new year with prices of the top coins plummeting alarmingly.

South Korea's backlash against bitcoin will come as a worry to bitcoin traders as the country is one of the currency's biggest markets.

China is heading towards banning the centralized trade of virtual currencies as well as venues and applications that use these currencies, namely Bitcoin.

South Korea is considering a new law that would outlaw cryptocurrency exchanges in a bid to quell speculative frenzy and criminal transactions.