The biggest news of the day has to be the sharp drop in the price of Bitcoin as reflected on most of the trading and exchange platforms. On CoinMarketCap, the price dropped by a whopping 10 percent from $15,000 to about $13,000. The massive drop was attributed to the plan by South Korean authorities to ban cryptocurrency trading. This is the latest in the wave of Government intervention in the cryptocurrency market after years of being undecided. The drop wasn’t permanent though as in the hours following the massive price change, Bitcoin prices started to recover slightly from its losses. This constant volatility is something that many commentators have identified as being a key issue in the market.
Understanding the South Korea Ban on Crypto
To many, this move will come as an absolute shock. Yet another Asian country is taking huge steps against cryptocurrency. The region was one of the first to provide an enabling environment for the flourishing of the technology. A lot of the advances in the market and in the technology have come from the same region. China is the hub of Bitcoin Mining, Japan is the de facto capital of the Asian Crypto market and South Korea has been a strong supporter of Bitcoin and crypto since the very beginning. The case with South Korea is especially surprising giving the fact that it a country that is ever present in the tech field.
South Korea reportedly has one of the most tech-savvy population in the world. the adoption of technology within the country is on an unprecedented level. After years of advances in Medicine, Science, Computer Technology, and Animations, the country has positioned itself as one of the great bastions of technology in the modern world. Samsung and Hyundai are among some of the largest tech-related companies in the world. Even the large multinational tech corporations tend to maintain a presence in the Asian Country.
For a nation that prides itself on being progressive and adopting sweeping technological changes, this decision comes as a bit of a shock. According to government sources though, there are concrete reasons why such a drastic step is being taken. Reports have emerged that this step is in line with the decision of the government to ban crypto exchanges from opening new accounts for customers at the end of last year. At the time, this move wasn’t seen in a negative light as far as cryptos were concerned. In fact, there were experts who hailed it as a laudable move by the government.
In 2017, the volatility of the crypto market was once again thrown into sharp focus. The price of Bitcoin rose astronomically in such a short space of time. This brought with it a significant increase in speculative investment in many countries around the world. Traders; experienced and novice alike, all seem to be racing to the market to get themselves a piece of the crypto pie. The South Korean government stepped in basically told crypto exchange platforms not to open accounts for new customers. After climbing to the mid $19,000 range, Bitcoin fell astonishingly to around about $13,000 in a matter of days.
This new move by the government has a different motivating factor behind it. It turns out that the government is trying to curtail alleged illegal activities of some local South Korean crypto exchange services. Earlier in the week, the South Korean police and tax authorities carried out raids on some of these exchange platforms over accusations of tax evasion. South Korea has had in recent times taken a tough stance against all forms of financial malfeasance in a bid to fight corruption which is reported to be a serious problem in the country. Numerous corruption scandals have rocked the country in the last couple of years across business and political circles.
Park Sang-Ki who is South Korea’s Justice Minister says the country has “great concerns” about the entire cryptocurrency model. According to Reuters, the South Korean Justice Ministry is set to introduce legislation that will effectively ban crypto trading via exchange platforms in the country. The attention of everyone invested in the market now turns to the country’s National Assembly and its 297 members to see how they will vote on the matter.
There seems to be a wave of government intervention in the crypto market. First China, and now South Korea is looking to ban crypto exchanges. All eyes will definitely be keenly monitoring the developments in the coming days and weeks. It remains to be seen how these moves will impact an already volatile market in the meantime. However, early predictions are that Japan could very well cement itself as the clear leader in cryptocurrency as far as the Asia theatre is concerned.