Cryptocurrencies slid sharply in early trade on Thursday after the South Korean government started taking strict actions against cryptocurrency trading in domestic stock exchanges. According to the South Korean Justice Minister, the government is looking to ban cryptocurrency trading in domestic exchanges. Moreover, Warren Buffett’s warning yesterday over the future of cryptocurrency also prompted a huge selloff in bitcoin and other digital currencies prices.
Bitcoin lost more than $2000 in value in early hours trading after the news of the ban hit the crypto markets, resulting in a loss of more than $106 billion of value in few hours alone.
Despite bitcoin and other currencies seeing some losses, the South Korean Presidential office said a ban hasn’t yet been finalized, it is among several options to be considered. It is reported that more than 55,000 citizens have signed the application, requesting the president to stop the potential ban and crackdown against digital currencies.
“For the last few months the Korean government has been making it very clear they want to bring this speculative activity under control,” said Thomas Glucksmann, Hong Kong-based head of APAC business development with cryptocurrency exchange Gatecoin Ltd. “This isn’t really too much of a surprise.”
Based on Korean Blockchain industry, the country is witnessing more than a dozen cryptocurrency exchanges in South Korea. Recently, the most popular website, coinmarketcap.com has also eliminated the South Korean exchange, due to the tremendous divergence in cryptocurrency prices, compared to other parts of the world along with the limited arbitrage opportunity.
Bitcoin and other digital currencies are trading at a 30% premium in South Korea, while the Justice Minister’s comments plunged prices almost 20%. South Korea is important, as it is the world’s third-largest market for cryptocurrencies.
On the other hand, several key market pundits are presenting a bleak picture for cryptocurrencies. Goldman Sachs, who loves growth and momentum investing, raised concerns over the future of Bitcoin. He believes on hand currencies are in a better position to work with blockchain technology compared to the cryptocurrencies. Therefore, investors should remain cautious over the buying and selling activities regarding cryptocurrencies.
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