Bitcoin Fumbles After Renewed South Korean Concerns

Bitcoin price plunged below 16% in Tuesday’s trade alone, driven down by the potential ban from South Korea and China. After a brief rally in yesterday’s trade, the largest digital currency experienced a massive loss in value, amid fresh comments from South Korean minister regarding the possible ban on cryptocurrency trading.

Bitcoin price dipped to the lowest level in the last six weeks, currently trading close to the $12,000 mark. Its market capitalization declined to nearly $2 billion, down significantly from the $327 billion it hit on December 17.

South Korea Finance Minister Kim Dong-Yeon said in a radio program that “the shutdown of virtual currency exchanges is still one of the options the government has”. Furthermore, the Chinese Central Bank said on Tuesday, they are planning to ban the centralized trading of cryptocurrencies.

Along with bitcoin, other cryptocurrencies are also tumbling after the renewed concerns. The majority of digital currencies are down more than 10% in Tuesday trade.  

Almost one month ago, cryptocurrencies were trading at their highest levels, while Bitcoin was moving towards the $20,000 mark. However, prices of most of the currencies are 40% lower from their December 17 high.

On the other hand, pessimistic reports from China also raised traders concerns. The Chinese government recently announced that they plan to ban bitcoin mining. And now, reports are showing they are increasing the crackdown on the digital currencies in China.

China plans to ban cryptocurrency trading in domestic markets along with blocking trader’s access to offshore platforms. Moreover, China seeks to target settlement, market-making and clearing services companies.

Several other countries, including Indonesia, have warned their citizens about cryptocurrency trading, due to their concerns related to the money laundering and terrorist funding through the digital currencies.

Goldman Sachs Asset Management Jim O’Neill said “you must be mad” to invest in bitcoin, adding that the investment in bitcoin is only justifiable if the price drops 80% from the current level. It wouldn’t be easy for bitcoin and other digital currencies to bounce back in the coming days, due to concerns related to the money laundering and terrorist funding.  Both these factors could force several other countries to take strict regulatory actions.  

Featured Image: twitter

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