Korea govt sends bitcoin on rollercoaster ride

A Bitcoin logo is shown at a Bitcoin trading store in Hong Kong Thursday Dec. 21 2017. Bitcoin is the world's most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are

Bitcoin Struggles as South Korean Ban Pushes Forward

In a further sign of the gap between the two markets, Ethereum Classic's price went up 7 percent at South Korean exchanges, while the altcoin dropped 10 percent in value in the worldwide market.

Investors and exchanges in South Korea were bracing themselves for what may amount to a government-issued ban on cryptocurrency trading; but conflicting reports from different parts of the government are now surfacing, leaving the global community rocking on its heels.

"There are great concerns regarding virtual currencies and the Justice Ministry is basically preparing a bill to ban cryptocurrency trading through exchanges", Park told local press on January 10. "It has started to resemble gambling and speculation", Mr Park added, citing the fact that bitcoin prices are higher in South Korea than globally - the so-called "kimchi premium".

Yesterday, the cryptocurrency index took to its Twitter platform to announce that it has excluded three Korean exchanges - Bithumb, Coinone, and Korbit from their averages "due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity".

In the meantime, the worldwide price of Ethereum dropped 1.6 percent at a similar time, drawing a stark contrast with the 6.1 percent price increase in South Korea, according to Bithumb's analysis based on data from website CoinMarketCap.

The website shows real-time prices and market capitalisations for more than 1,300 cryptocurrencies and is widely followed by market participants.

On the same day, financial authorities inspected six local banks that offered virtual accounts for corporate customers. While this news isn't good for investors of virtual currencies, it also doesn't mean that a ban is a sure thing.

Bitcoin is the world's most popular digital currency, or cryptocurrency, and its price soared a year ago as private investors piled in.

But the MSF disagreed, saying, "We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban". Many traders say that they reacted to the change in the data which resulted in further decline in the prices which was perceived to be a heavily falling market.

Latest News